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 IntelligenceIn this chapter, Larry discusses prudent investing.The Uniform Prudent Investor ActThe 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 investingIn 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 investingLarry 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 goAccording to Sher, managing money in an efficient market without investing passively is investment malfeasance.

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 assetGold 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 evidenceIn 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 horizonThe 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

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 TailsIn 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 tailsIn 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 swansWith 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...

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 RightlyIn 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 isolationA 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 returnAccording 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 portfolioLarry 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...

Listen onApple | Listen Notes | Spotify | YouTube | OtherQuick takeIn 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 cloudyIn 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 riskTo 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...

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 profileDamon 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 allyIn 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.Rapid innovation is outpacing businesses. Those lagging behind will be overtaken by competitors who have adopted new technologies.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.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 threatsDamon 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 advanceFurther, 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 technologyDamon 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 fastAnother way to deal with the business threats is to move fast. Damon says that speed sells, and businesses must adopt a speed 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 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 BelieveIn 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 riskyLarry 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

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 profileAva 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 everAva 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 learnedIf 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 takeawaysEmbrace 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 adviceRefrain 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 recommendationsAva 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 monthsAva’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

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 HorizonIn 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 risksLarry 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 ownershipLarry 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...

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.&nbsp;“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&nbsp;Guest profilePritesh 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 everPritesh’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 learnedPut 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 adviceStay 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 recommendationsPritesh 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 monthsPritesh’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&nbsp;“Remember, it’s a marathon, not a sprint.”Pritesh Ruparel&nbsp;[spp-transcript]&nbsp;Connect with Pritesh RuparelLinkedInWebsiteAndrew’s booksHow to Start Building Your Wealth Investing in the Stock Market<a href="https://amzn.to/2PDApAo" rel="noopener noreferrer"...

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.&nbsp;“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&nbsp;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 PlaceIn 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 insanityLarry 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...

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.&nbsp;“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&nbsp;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 BoxIn 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 gameActive 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...

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.&nbsp;“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&nbsp;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 ChanceIn 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&amp;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...

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.&nbsp;“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&nbsp;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 GameIn 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: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.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.Additionally, pension plans will always choose the manager who makes an excellent presentation, explaining why they succeeded and would continue to succeed.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.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.The fees they pay for active management are typically lower than the fees individual investors...

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.&nbsp;“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&nbsp;Guest profileAndrew 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 everMuch 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...

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.&nbsp;“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&nbsp;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 IllusionIn 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 modelThe 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&amp;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 &amp; 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...

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.&nbsp;“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&nbsp;Guest profilePavan 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 everPavan 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 learnedDon’t make exceptions; the rules are the essence.Set up concentration risk limits and reflect the volatility of that asset.DiversifyDon’t sit on losses.Andrew’s takeawaysFollow and stick to a stop-loss system.Don’t buy something just because you’ve sold something else.Actionable adviceSet your concentration risk limits, put your trading style in place, and diversify.No.1 goal for the next 12 monthsPavan’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&nbsp;“All the best, guys. Invest wisely and invest well, and when it works, do...

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.&nbsp;“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&nbsp;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 ForIn 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 returnsIt’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...

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.&nbsp;“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&nbsp;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.&nbsp;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 AnalysisIn 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...

Click here to get the PDF with all charts and graphs&nbsp;Introducing emerging marketsOur FVMR frameworkFundamentals: Emerging markets are about 20% less profitableValuation: Emerging markets are about 41% cheaperAsset class and region/country allocationsIntroducing emerging marketsOur FVMR framework&nbsp; &nbsp;Fundamentals: Emerging markets are about 20% less profitable Valuation: Emerging markets are about 41% cheaper UK: Cheap and high profitabilityGermany and Korea: Cheap and low profitabilityAustralia and US: Expensive but high profitabilityAsset class and region/country allocationsThis is not a recommendationMy next rebalance is in early SeptemberEverything could change thenThis is not a recommendationMy next rebalance is in early SeptemberEverything could change then&nbsp;Click here to get the PDF with all charts and graphs&nbsp;Andrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:<a href="https://www.astotz.com/" rel="noopener noreferrer"...

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.&nbsp;“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&nbsp;Guest profileJustus 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 everJustus 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 learnedWhat 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 takeawaysTiming matters, but you can never really know whether your timing is right until after.Transferring a business model doesn’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 06: Market Efficiency and the Case of Pete Rose.LEARNING: Don’t try to pick stocks or time the market.&nbsp;“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&nbsp;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 RoseMany 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 RosePete 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 efficiencyLarry 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...

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:&nbsp; A higher PE doesn’t mean a higher expected return.&nbsp;“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&nbsp;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 InvestmentsChapter 05: Great Companies Do Not Make High-Return InvestmentsIn 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 companiesAccording 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 returnsThe 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...

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:&nbsp; Focus on building a robust asset allocation plan, regularly rebalancing it, and stick with it.&nbsp;“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&nbsp;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 hypothesisLarry 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...

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:&nbsp; 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.&nbsp;“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&nbsp;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 ManagersIn 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 luckOne 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 outperformanceWhen 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

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.&nbsp;“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&nbsp;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 PricesIn 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 bettingTo 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...

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.&nbsp;“Sometimes the math, the probabilities—everything—can make sense, and you still end up being wrong.”Rizwan Memon&nbsp;Guest profileRizwan 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 everRizwan’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 learnedWhen 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 takeawaysBlack 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 adviceAvoid 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 recommendationsIf 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...

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.&nbsp;“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&nbsp;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 BondsIn 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 modelThe 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:Market beta (the return of the market minus the return on one-month Treasury bills)Size (the return on small stocks minus the return on large stocks)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 modelLarry 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 AlphaAnother significant academic research publication is the...

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.&nbsp;“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&nbsp;Guest profileMark 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 everMark 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 learnedYou 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 takeawaysThe 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...

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.&nbsp;“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&nbsp;Guest profileJusper Machogu is a farmer in rural Kenya, an agricultural engineer by profession, and an advocate for Fossil Fuels for Africa.Why Africa needs fossil fuelsIn 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&nbsp;“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&nbsp;[spp-transcript]&nbsp;Connect with Jusper MachoguTwitterSubstackAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst...

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.&nbsp;“Being focused is probably the greatest asset anyone could have when it comes to success in business or otherwise.”August Biniaz&nbsp;Guest profileAugust 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 everUpon 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 learnedBeing 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 ofUnderstand what’s happening in macro, economic, and political situations.Andrew’s takeawaysWhen 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 adviceIf you’re in

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.&nbsp;“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&nbsp;Guest profileWilliam Browder is the CEO of Hermitage Capital Management, Head of the Global Magnitsky Justice Campaign, and author of Red Notice and Freezing Order.&nbsp; 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, &amp; 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 everDuring 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 learnedThere 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...

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 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.&nbsp;“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&nbsp;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...

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.&nbsp;“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&nbsp;Guest profileChris 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 everWhen 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 learnedDon’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 adviceHire 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 recommendationsChris 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 monthsChris’s number one goal for the next 12 months is to launch a wealth app and attract 100,000 users.Parting words&nbsp;“Thank you very much for having me on. I really enjoyed it, and I wish you all the best.”Chris Ball&nbsp;[spp-transcript]&nbsp;Connect with Chris BallLinkedInFacebook<a href="https://hoxtoncapital.com/" rel="noopener noreferrer"...

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.&nbsp;“In entrepreneurship, every failure teaches you something. It makes you stronger and better in doing what you’re doing.”Vivek Raina&nbsp;Guest profileVivek 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 everWithin 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 learnedWorking 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 takeawaysDon’t be too harsh on yourself when you fail. Remember, you did your best with what you knew at the time.Actionable adviceTo 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 recommendationsIf 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...

BIO: William D. Cohan, a former senior Wall Street M&amp;A investment banker for 17 years at Lazard Frères &amp; 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.&nbsp;“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&nbsp;Guest profileWilliam D. Cohan, a former senior Wall Street M&amp;A investment banker for 17 years at Lazard Frères &amp; 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 mattersThe 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...

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.&nbsp;“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&nbsp;Guest profileTony 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 &amp; 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 questionsTony 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 riskAccording 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...

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.&nbsp;“Unfortunately, the evidence is hedge fund managers demonstrate no greater ability to deliver above-market returns than do active mutual fund managers.”Larry Swedroe&nbsp;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 WiselyISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake ExpertsISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak...

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.&nbsp;“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&nbsp;Guest profileChris 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 everChris’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 learnedWhen 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 takeawaysDon’t underestimate the funding needed to go big time.No.1 goal for the next 12 monthsChris’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&nbsp;“Have the courage to turn up and give your best.”Chris Kendall&nbsp;[spp-transcript]&nbsp;Connect with Chris...

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.&nbsp;“Your greatest expense is the money you don’t make, the opportunity cost.”Riggs Eckelberry&nbsp;Guest profileRiggs 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 everIn 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 learnedYou’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 takeawaysYou’ve got to be able to paint a vision of the scalability of your venture.Actionable adviceYou 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 recommendationsRiggs recommends reading The Innovator’s Dilemma. The seed of the destruction of every enterprise is in that enterprise, and the...

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.&nbsp;“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&nbsp;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 WiselyISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake ExpertsISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?<a href="https://myworstinvestmentever.com/isms-27-larry-swedroe-familiar-doesnt-make-it-safe-and-youre-not-playing-with-the-houses-money/"...

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.&nbsp;“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&nbsp;Guest profileLark 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 everLark 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 learnedNever 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 takeawaysSeparate 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 adviceGo slow on-chain and test the waters first before you put 100% of your money into it. You’re not missing out on anything;...

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.&nbsp;“Be intentional about what you invest in. You can’t be good at everything.”Sam Primm&nbsp;Guest profileSam 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 everWhen 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 learnedBe 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 takeawaysTake 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 adviceDon’t just buy something because it’s cheap. Focus on what you’re good at and what’s proven.Sam’s recommendationsSam recommends taking advantage of the many available resources, such as his...

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 &amp; Doom Report” and the “Monthly Market Commentary,” earning international recognition as the pessimistic stock market expert “Dr. Doom.”STORY: In the late 1990s, Marc became convinced that the Dotcom bubble would burst. However, at the turn of 2000, Greenspan injected liquidity into the system because everyone was talking about the millennium. This caused the NASDAQ to go another 30% between January 1 and March 21. Marc was heavily short throughout this vertical rise.LEARNING: Diversify in stocks, bonds, cash, precious metals, and real estate. Don’t be overly bearish.&nbsp;“When you lend money to friends, you risk losing everything. You may lose your money and your friends.”Marc Faber&nbsp;Guest profileDr. 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 &amp; 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 &amp; 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 everIn the late 1990s, Marc became convinced that the Dotcom bubble would burst. So he went overly bearish. However, in 1999, the NASDAQ doubled within just a few months. Then, at the turn of 2000, Greenspan injected liquidity into the system because everyone was talking about the millennium. This caused the NASDAQ to go up another 30% between January 1 and March 21. Marc was heavily short throughout this vertical rise.Marc had assumed that more companies would go out of business than survivors. He overlooked that you could be short ten stocks and nine go down 100 percent. The nine will go bankrupt, but the one that survives can go up 100 times. So, being on the short side made it difficult for Marc to make money.Lessons learnedDiversify in stocks, bonds, cash, precious metals, and real estate.Andrew’s takeawaysDon’t be overly bearish.Actionable advicePractice true diversification by owning investment assets in different regions, say in America or Europe, but also some properties may be in China, Hong Kong, Singapore, Thailand, Indonesia, or Latin America, and some assets held with a custodian in these countries.Marc’s recommendationsMarc recommends reading The Economics of Inflation and Capitalism and Freedom.No.1 goal for the next 12 monthsMarc’s number one goal for the

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.&nbsp;“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&nbsp;Guest profileWhat 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 everCoach 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 learnedDiversify inside and outside the asset class.Pull out your money and play on the house money.Andrew’s takeawaysWhen you make massive gains, take some profit.Actionable adviceAlways 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 monthsCoach 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&nbsp;“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&nbsp;[spp-transcript]&nbsp;Connect with Coach JVTwitterFacebookInstagramYouTube<a href="https://linktr.ee/_cjv"...

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.&nbsp;“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&nbsp;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 WiselyISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake ExpertsISMS 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<a...

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.&nbsp;“Make sure that whatever you invest in is what you want to spend your next decade trying to figure out.”Solomon Thimothy&nbsp;Guest profileSolomon 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 everSolomon 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 learnedEvery entrepreneur fails, so permit yourself to fail.Andrew’s takeawaysNever develop your own app or software; use what already exists and has been tried and tested.Actionable adviceMake sure that whatever you invest in is what you want to spend your next decade trying to figure out.Solomon’s recommendationsSolomon 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 monthsSolomon’s number one goal for the next 12 months is to impact the business and income of 10,000 entrepreneurs.Parting words&nbsp;“Keep taking risks. I know you want to reduce them, but there are those that will win big.”Solomon Thimothy&nbsp;[spp-transcript]&nbsp;Connect with Solomon Thimothy<a...

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.&nbsp;“Live to trade another day.”Anthony Greer&nbsp;Guest profileAfter 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 everWhen 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 learnedAlways 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 takeawaysPosition 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 adviceLive to trade another day by trading carefully without greed.Tony’s recommendationsTony recommends subscribing to his Morning Navigator newsletter and reading <a href="https://amzn.to/49mrVkK" rel="noopener noreferrer"...