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

Episode 271

  • Sell discipline is extremely important
    • Sell weaker companies for stronger
  • Ability to be flexible is critical
  • Dal bar study
    • Psychological factors, capital not able to invest, capital needed for other expenses
  • In a period of volatility
  • The reason investors are not successful
    • Psychological takes up 50%
  • Loss aversion: the fear of loss draws to selling at lows
  • Average time period people hold a mutual fund: 3.8 years
  • Narrow framing: making decisions about a part of a portfolio
    • No one position breaks the long term

March 26, 2018

Episode 270

  • Radio guest Jason Walgrave
  • Current twin cities market
    • Apartments are fairly tight
    • Housing market and prices are going up
  • Rental market is highly competitive
    • Gives owners the ability to be picky with renters
  • “Buying is still more financially sound than investing”
  • The affordability index
    • Currently 200
    • Price of homes (you’re making twice as much as you need to afford the home)
  • Tental payment vs mortgage payment
    • Don’t pay cash

March 20, 2018

Episode 269

  • Stock market is due for a huge crash!!
  • There is a new normal, some are saying investing will go back to the way it use to be
  • When some invest, the euphoria of seeing stocks go up is the same that addicts feel from cocaine
  • Many investors view the stock market as a gamble
    • From business owners
    • It's a gamble because people don’t know what they own and why
    • aka no clarity
  • There are risks in everything
  • Cookie cutter approaches and the race to the bottom on lowering fees
  • 5 tips
    • Know what you own and why
    • Get a second opinion
    • Trust in diversification 
      • Asset allocation is just as important!!
    • Be ready to buy the dip
    • Get a second opinion

March 13, 2018

Episode 268

  • Radio guests: Chris and Brad
    • Kaplan Insurance agency
    • Property causality 
  • “It's a price competitive situation”
    • Looking for appropriate insurance to protect you and your ownership
    • Must understand where risk lie in other investments, not just investment performance 
  • Channels for insurance
    • Direct
    • Captive arena
    • Agencies
  • Biggest mistakes people make
    • Finding insurance through the wrong people
    • Certified insurance counselor
      • Legal to sell insurance but doesn’t mean they always know what they’re doing

March 8, 2018

Episode 267

  • The longer your portfolio is going up the more complacent investors become 
  • Short term moves of markets instead of long term objectives of money
  • Why do you care if there is a financial crisis?
  • Volatility’s an opportunity creator
  • Investors will start to care more about their money when corrections happen
  • People need to understand how their money is allocated
  • The difference between risk and investment
    • Beta of a portfolio is the volatility associated with it compared to a benchmark
  • Risk is relative… it is not absolute

March 6, 2018

Episode 266

  • Short term investors are extremely myopic and emotional
  • Big news coming out about Zest
  • Investors will not buy stock when its going up… but they never buy when its on sale?!!!
  • Volatile periods like this are the times that create opportunities to invest in great businesses
  • Stress test example of a radio listener
    • Tolerance for risk/volatility is extremely important
    • Investment objectives matter
  • Investors spend all their time focusing on individual companies and not the portfolio as a whole
  • Time in a business not timing a business
  • Example about “great winners” over the years
  • Reporting structure: you don’t have the most accurate info on how your portfolio is doing

March 1, 2018

Episode 265

  • The media is all about volatility and investing in “the market”
  • Technical investing is looking at charts and technical indicators 
  • A 40% pullback is pretty big
  • When you get fully invested at 20%. your downside is 20% and so is your upside
  • Be fearful when others are greedy and greedy when others are fearful
  • Not a fundamental correction, its a technical correction
  • Don’t listen to predictions, listen to process
  • Invest in businesses over time
  • You should have an appropriate asset allocated portfolio
  • Most investors who own mutual funds and ETFs do not have flexibility
  • Corrections are part of a NORMAL market!
  • Consider a rebalance of your portfolio 
    • Static rebalance
  • Do not allow your emotions to get the best of you
  • Headline: put yourself in a strong position to capitalize
  • Most people believe this correction is a deleveraging correction and not a fundamental correction

February 8, 2018

Episode 264

  • If you don’t understand how your money is being managed you need to take an investment stress test
    • There are far too many risky investments
  • Modern portfolio theory is used to create allocations for portfolios
  • Your asset allocation is extremely important when it comes to how your money should be invested and the affect volatility may have
  • Everyone has a threshold for loss in the short term
  • Allocated properly, not just diversified
  • Emotions generally drive actions
  • What do you do from a volatility standpoint as an investor?
    • You just stay the course
    • At the same time volatility provides opportunities
    • Created when you utilize your buy discipline and sell discipline
  • Tax loss harvesting
  • Selling weaker positions to buy stronger positions
  • There is nothing wrong with taking profit along the way and lock in some gains
  • A pension is not guaranteed
  • Portfolios are not always compared apples to apples
  • When corrections and uncertainty fall on the market most investors will sell their index fund and will move to cash
  • KISS - keep it simple
  • The great businesses will always rebound

February 7, 2018