Episode 291

  • A lot of the things the industry puts out sets investors up to fail 

  • 8 months is the average holding period for investing in a company

  • Investors do not have na understanding of what they own and why they own it but also they don’t understand how decisions are made in their portfolio

  • Expecting the future to look like the past, and missing out on humility 

    • One of the top things investors don’t understand

  • “Beating the stock market”

    • What stock market?

    • A market is somewhere you go to buy and sell goods and services

    • Stock market is where you go to buy and sell businesses

  • You should not have 100% of your money in the S&P 500

    • Therefore at no time should you compare your performance to the S&P

  • Should be asset allocated 

  • Discipline in investing is PARAMOUNT

    • To your process

    • Buy and sell discipline

  • Beating a benchmark is a misleading statement

    • The only benchmark your portfolio should be up against is “am i getting closer to my goals”

  • Successful investing

    • Investing in great businesses over time

    • Don’t over diversify and allocate properly 

    • Consider volatility your friend 

  • Forget what happens over a short period of time

October 2, 2018

Episode 290

  • Investing is a process. many investors do not want to commit to a process

  • what are the parameters investors use to judge how “happy” they are with their financial advisor?

  • what services are people not getting that causes them to be upset

    • communication?

    • returns?

    • content?

  • we are all at some level looking for clarity in our lives

    • jobs, money, bills

    • we spend too much time worrying

  • the media is hyper focused on comparing your portfolio to the performance of the S&P 500

    • no portfolio should have 100% of their money in an S&P 500

    • you’re diversified but you’re not asset allocated 

  • lack of clarity in the investment world at what they should be looking at to gauge how well their investments are doing

    • it is not about rate of return or beating a benchmark 

  • rate of returns is RELATIVE

  • risk aversion?

  • how do you properly gauge the probability of loss? You can’t

  • a key to success: expectations

    • having reasonable expectations and managing them

august 30, 2018

Episode 289

  • logic class story

  • not many students passed the class

  • was talking about statistical probabilities, logic and common sense on tuesday

  • you would like to have the best odds possible to make you successful

  • having the ability of knowing what you own and why has a great statistic that you will be more successful

  • you’re better equipped to make better decisions

  • interesting things happening in the market

    • “counter currents”

  • financial planning put out an article: the top performing active months

    • one of the big reasons people move their money from advisors is for lack of performance

    • when you move your money from one place to another do you know why there was poor performance?

august 9, 2018

Episode 288

  • seminar event coming up in September

  • more to come 

  • why do we continue to believe this is a great time to be an investor?

  • investing has been generalized and opaque

    • does not help one successful when it comes to investors

  • “isn’t the market too high to get into right now”

    • investors continually hear that the market is overvalued

    • that is why you dont want a cookie cutter approach, you want a strategy

  • people think that as soon as you invest money with an investor that it should be put to work right away

    • that is irrational thinking

  • “you pay me to know when to own cash, not just to hold you in cash”

  • the more you know about what you own and why you own it the more it enhances your ability to reach your goals

  • how many times does the market have a 5% or more correction per year?

    • 3 times a year

    • the average length is 46 days

    • 1948-2008

  • people live with FOMO

    • an emotional predisposition

    • the volatility hits and now they have FOLO: fear of losing out 

  • last time we had 3 5% corrections was June 2016

july 24, 2018

Episode 287

headline “are your finances keeping pace?’

  • Keeping pace with what?

  • “markets were up today regardless of all the trip rhetoric”

    • that means people don’t care much about it

  • you need to own emerging markets, international, and US

    • your portfolio could do really well in the US but if the other areas start to do well the US doesn’t preform as well

    • meaning it could Skew your average over time

  • you must have a game plan that not only has an understanding of the strategy of how your money is being managed (risk adjusted returns) and what you are investing for

  • you don’t necessarily have to invest as aggressively as you are

july 17, 2018

Episode 286

they key to successful investing is investing in great businesses over time

  • USING volatility as a strategy 

  • it simply can’t be done by buying mutual funds and ETFs

  • the four keys to successful investing

    • Philosophy

    • strategy

    • flexibility

    • transparency

  • why are people not successful in investing?

    • multiple reasons why this happens

  • the four keys are the root to success

  • the strategy is how things are implemented, when do you buy and sell

  • empirical and behavioral aspects 

  • at Nepsis we don’t sell you a product we provide you with clarity for a process

    • time tested way that helps investors be successful

  • wall street and the industry as a whole really falls short on these topics 

  • investors don’t understand volatility

    • because the industry continues to tell you that volatility is risk

    • it allows you to buy more of what you want on sale

    • investors either sell or they move money without knowing the risk 

july 12, 2018

Episode 285

market is quietly creeping up higher

  • there are reasons for every decision made when it comes to portfolio management

  • diversification vs assets allocation

    • two completely different strategies

  • raise to the bottom in fees and cost for money management

  • management fee is not a cost… its an investment

    • people are working for you on your behalf

    • if someone is worthy of being paid a certain amount that means they are doing a great job and deserve the payment

  • many investors view volatility as risk and as a negative

  • volatility traditionally creates opportunity

  • confidence and clarity is key in terms of your investment process

  • everyone wants a good deal and to pay the least amount as possible

  • canibalization

    • people are devaluing what it is that advisors do

    • make it a price or a commodity

    • robo advisors have been very popular due to price

July 10, 2018

Episode 284

  • You get what you pay for

  • Correction and some of the company affected and what they are doing now for portfolios after the fact

  • Where are we in this but market?

    • Will lead to serious tremendous opportunities

  • News of the day: Warren buffet interview

    • We need to eliminate “short term-ism”

      • The idea of looking at your investments with short term thinking

      • Stop providing quarterly earnings guides

  •  Investing starts with the idea of knowing what you own and why

    • Brings greater clarity to the investor

    • We all work hard for our money

    • But money has a different value from person to person 

  • With any war, you want to be in a position to win. In investing its the same thing

  • Do you think xyz is going to go away?

    • If it’s $100 today but it was $150 a few months ago; ask yourself if the long term fundamentals have changed. if they have not then why wouldn’t yip purchase at a lower price

June 7, 2018

Episode 283

  • Active management works!
  • Dividend stocks were up today!
    • 10 year went down and so did interest rates
    • Interest producing investments go up
  • Our economy has grown for years and generations
  • Interest rates are historically low
  • When the market is closed for a long weekend we have pent up issues in the market
    • Anti establishment groups blocked by Italy
    • High majority of the italians want to stay in the EU
    • What kind of impact does italy have globally?
  • What does the rest of the year hold?
  • If you know what you own and why you own it you are able to take advantage of opportunities

May 29, 2018

Episode 282

  • What to do when the markets are down
  • The mentality of the investor is skewed by research results in regards to market peaks and declines
  • Stats on the dow being down and its frequency
    • In a market decline the value of businesses goes down
  • This tells us that we are in a short term thinking market
  • Article on how to deal with market down time
  • Article says its okay to be nervous, but Nepsis says you don’t need to be nervous!!
  • Going over stats of investors missing the best market days!
  • Long term bull market for bonds
    • Interest rates continuing to go down
  • Now they are beginning to creep back up
    • Has an impact on short fixed income investments

May 22, 2018

Episode 281

  • Article: “Pope is worried about the market”
  • Derivatives are an area we don’t spend much time talking about
    • Contract between two or more people where the value is based off underlying securities
  • The movie “The Big Short”
    • CDS = credit default swap
  • People focus on the financial crisis; when people invest in stock and equity the general rule of thumb is the time horizon is 5 years
  • Financial crisis creates more opportunities to buy great businesses
  • You always want to be investing and preparing for the next correction 
  • Asset allocation strategy is so important
  • Investing in bonds is extremely dangerous
    • You must understand why you’re owning the bonds
    • As inflations and interest rates go up, so does buying goods and services 
  • Investment portfolio should be about growing faster than inflation for having the purchasing power

May 17, 2018

Episode 280

  • Discussing the masters of investing
    • Warren Buffet
    • Benjamin Graham
    • Sir John Templeton
    • Peter Lynch
  • Economies expand and contract
    • If you're invested in a great business over time why would you send that business in a time of contraction
  • Investors are overwhelmed with junk and noise in regards to the market
  • Why do investors buy at the top and sell at the bottom
    • They only put money in when everyone is excited
  • There is no strategy is trying to time something illogical like the market
  • Investors do not understand the statistical risk of timing the market
  • “Sexy stocks”
    • Amazon, Google, Netflix

May 15, 2018

Episode 279

  • Comparing funds to each other
    • You could be comparing different investments and the comparison is irrelevant
    • Same goes for rate of returns between two portfolios
    • Comparing your portfolio to the S & P 500
    • Comparing to an index is irrelevant
  • Are your investments doing the best they can and am i on track to have the future i want to have
    • That is the best questions to answer 
  • Investments doing the best they can is not about a rate of return
    • It is only a snapshot in time
    • How can you do a comparison if you are a long term investor?
  • Do you know where the greatest risks lie in your portfolio?
  • DO NOT post yourself at risk for not achieving your goals
  • If the reasoning to justifying your portfolio return is by comparing it to an index you are not investing with clarity
  • You don’t make or lose money until you sell

May 10, 2018

Episode 278

  • Investment policy statement (IPS)
    • Document drafted between a portfolio manager and a client
    • Describes the strategies that the advisor should employ to reach goals
    • Most money that is overseen for people is by financial advisors
    • They pick the “managers” that manage the money for you

1. IPS helps establish reasonable expectations objectives and guidelines

2. Set forth an investment structure of permitted asset classes, allocations

3. Encourage effective communication between the advisor and investors

4. Create the framework for a well diversified asset mix that can be expected to general acceptable long term risk

Success in a portfolio

  • Portfolio principles
  • Asset allocation and diversification

Some investors believe that when they give the responsibility to someone else to manage their money, they take any responsibility off of themselves

  • It is YOUR money
  • If something happens, it is just as much your responsibility to know 
  • Hold yourself accountable as well!!
  • Having an investment policy statement will only help the process
  • Where are your expectations? Are they reasonable

May 1, 2018

Episode 277

  • There are so many variables that determine short term and long term outcomes of processes 
  • The valuation of a business and the markets are relative
    • What someone else is willing to pay for something, someone else might not be willing to pay
  • Facebook question: I am a mutual fund guy and if I do single stocks, it would not be one of the FAANG stocks. What are my options? Do i stick to contracts or smaller shares?
    • Mutual funds can be great for people who are just starting to invest
    • Designed to bring diversification, but it may not bring you asset allocation
    • Many investors think that when they own many mutual funds they are diversified, which they are but they are missing the asset allocation and different classes
    • If you’re going to invest in individual “stocks” your mentality should be that of a business owner
  • We see volatility as an opportunity
  • You don’t make or lose money until you sell 
  • Stocks don’t trade on a timeline or based off of emotions
  • Price to earning ratio of the S&P500
    • Trading at 16-16.2 times earnings
  • It all depends on how you are managing the process 
  • When you look at economic indicators, things look very good
    • But everyone is worried and focused on the short term instead of the long term
    • Volatility is going to create the opportunity for you to take advantage of the businesses you own on sale

April 24, 2018

Episode 276

  • When you are passive you miss out on investment opportunities
  • Corrections not only happen in the market but in specific markets
  • High conviction investing
    • You need time to let investments play out
  • “The longer you own stocks the less risky they become”
  • Mark goes over index performance
  • Time in your investments, not timing!

April 19, 2018

Episode 275

  • Anytime you invest in a company, you should not expect to make money for AT LEAST 5 years if not longer
  • Talks about apple and its fluctuations
  • Never be afraid to take proof
    • When you own businesses long term you take profit when they go up
  • Going over the apple charts
  • Forget about the market!
    • The market is the place you go to to sell investments
  • Buy discipline and sell discipline are equally important
  • Apple use to be an awful stock
  • No one company should make or break your portfolio
  • There's nothing wrong with taking profit or buying something on sale for the overall portfolio
  • DO NOT myopically focus on one position in your portfolio
  • With in the framework of your portfolio your buy and sell discipline should enhance your portfolio
  • The power of clarity can not be measured

April 10, 2018

Episode 274

  • When to see a position when you don’t believe in actions of certain 
    • Direct tv example
  • Zest technologies talk
  • There is a fiduciary role that a manager must play
    • Half the ability to understand a company and be able to talk with leadership with in firms and businesses is so important
    • How active and involved do you want to be in an investment?
  • Warren Buffet doesn’t talk to executive management teams
  • At what level do you get involved in your investments to make sure its working hard for you?
    • Some people do not care
  • Investors are focused more on buying indexes because they are “cheap”
  • Of the top 50 stocks: 48.4% of the S&P 500
    • 500 stocks sitting there as part of the overall index
  • FAANG stocks have very large valuations and can cause extra risk
  • You get what you buy
  • Can you put a value on what you own and why you own it?

April 5, 2018

Episode 273

  • Today was a crazy market
  • “Algo” Day
  • FAANG stocks
    • Facebook, Amazon, Apple, Netflix, Google
    • Very high valuations
  • It is extremely important to have a buy discipline and a sell discipline
  • Why is it important for people to understand the FAANG stocks and their movement
  • If you’re feeling a sense of discomfort or feeling nervous about your portfolio it might be time to sit down with your advisor and assess your risk tolerance
  • Make the appropriate adjustments in your portfolio
  • We are only talking about a VERY SHORT period of time
  • 18-19% increase in earnings in 2018
  • Properly asset allocated portfolio is overlooked and extremely important
  • It's virtually impossible to look at someones portfolio on a quarterly or annually basis- you need to give it 5 years 
  • You can’t be short term thinking if you want to be successful

April 3, 2018

Episode 272

  • Guest: Mike Ouverson
  • Don’t pay off your house if you can?
    • No mortgage at retirement
    • Goal is to be able to pay it off if you want to
  • You always want to be in a position of control 
  • Affordability index
  • Credit scores can cost you a lot of money or save you a lot of money
  • How to get your credit score up
    • Make your payments

March 29, 2018