Your Portfolio Is a Fingerprint of Your Personality | Jim Lebenthal

I am telling you just from empirical observations, it doesn't work.

“I've seen it work once in a while, which is the worst thing that can possibly happen to somebody,”

and what that does Ryan is it turns a temporary loss into a permanent loss. I think the biggest investment virtue that somebody can have is patience. Your portfolio is a fingerprint of your personality. It really is. All right, Jim, I want to start in a place that some of this is going to be my own bias of thinking, but I really want to get your, your kind of take on this idea and go wherever you want with it.

But it's the starting spot that I wanted to begin our conversation with, which is

much of the frustration, confusion, anxiety, stress that I see maybe above the norm that we're

experiencing today. So if we'd buy in that today there is a, at least measurable amount of additional anxiety, frustration, stress that people are feeling maybe then what baseline would be in other times if we can buy into that idea? I see so much of that being people not living in reality. You know, I mean, not playing the game on the field, playing a game that they wished happen. Like, I wish that I could just find one stock or one polymarket bet or one crypto coin that's just

going to change everything for me and tomorrow I'm a millionaire, right? And like, but it's like, that's not, well, no, that's not how the world works. Or, you know, I wish that this,

this industry was going to be the next thing and or whatever and what you wish, what you hope

happens, you can't invest, you can't build wealth around hopes and dreams, right? So like, how one do you do buy into and/or believe this idea of operating in reality? And in the world that you live in and the work that you do, how do we do that? Like, where do we start? How do we know or we're making decisions from ground truth versus, you know, some conceptual idea that some talking head hat on X that we follow? Yeah, what a great place to start Ryan. Thank you. And I

“agree with you pretty strongly about people are living in shall we say alternate realities?”

I have a pretty strong viewpoint that social media is a cauldron for cooking up those alternate realities, but but let's not go down that rabbit hole at least not just yet. I think I want to start with the punchline, which is, you can, you can study what works and what doesn't work. And let me give you an example from the world of investing, which is where I live. There are many stories that you can look out again on social media and you can see these people who look like they've made

it rich quick. Generally speaking, that doesn't happen, okay? Making it rich quick is very much the exception. And when it happens, it happens in the world of investing by taking on gargantuan amounts of risk that almost randomly work out. So in terms of something that I very, very passionately believe. And this is a core truth of investing that if somebody wants to say to answer your question, what can they do? It matters that you stay in the market. Not try to time the market, not try to say,

hey, I think the conflict with Iran is going to end on this date and that's when I'll get invested, but then we've got the elections coming up and I'll get out a week before that. I am telling you just from empirical observations, it doesn't work. I've seen it work once in a while, which is the worst thing that can possibly happen to somebody when they get market timing right once, then they think they can do it again and again and Ryan, I've seen wealth destroyed by that. I've seen people

sell it the wrong moments and then try to chase the markets up and up inevitably getting back in right at the wrong moment. So more than anything, stay in the market. It is your time in the market that matters. The old true wisdom, it's not timing the markets, it's time in the markets. One corollary to this and believe me, I can go on for a while so I want to give you a chance to interrupt me here, but an important corollary to this is when you're investing and you're talking about

“being in the market for a long time, you have to be in high quality stocks. Now anybody who has”

watched me on air talk about stocks, they know that I've got a few flyers in my portfolio. But out of a portfolio of 30 names, you're talking about less than five that are, I don't want to say speculative because I don't want to be insulting to myself, but maybe have higher risk components to them.

going to make it through thick and thin and I'll close this soliloquy again, I can go on for a while

“by saying this. If you take the last five crises that the market has faced, so that's the great”

financial crisis, that's COVID, that's 9/11. If you happened to invest just before those downturns, like you got the timing absolutely wrong, but you stayed in. So you had that downturns say in the

great financial crisis of greater than 50 percent, but you stayed in, your annual lives return

from investing at the exact wrong point in time is about 10 percent. For each of the last five crises, you just have to stay in, you can only do that with high quality companies. Let me pause there for a second. What is the emotional trigger that we have to be aware of watch that we'll say the average investor, right? So someone who maybe wants to do a little, I mean, and this might not be having better. Let's take this is kind of our ICP for the conversation.

Is someone who knowing my audience most likely has probably most of their wealth in a business they own of some sort, whether it's a side hustle business or they're a bit of true,

try and true business owner. They have a 401k or something probably in some like

mutual funds or whatever, and then they like to dabble a little more, right? They like to do a little bit more, maybe some individual stocks, etc. Okay. So let's take that kind of as our avatar. What are the, what are the feelings, the emotions, the triggers? They're going to get that they're going to make them want to pick up the phone and go sell sell seller. You know, I'm like, how do they, how do you create a system or a mentality that allows you to not fall

for those moments and sell at the wrong time or panic seller, panic, panic buy, like Chase,

“you know, I mean, like just stay consistent, stay true. How do you, how do you develop that mindset?”

You know, that's another great question because I think we have to embrace that emotions are real. The idea that you're not going to have emotions is, in my opinion, an unrealistic expectation. You know, I spoke before we started about one of your recent podcasts with Mr. Bouchowski, I believe, was his name, the fighter pilot. And I really admired that. And if you when I admired him because he was so objective, you know, with here's the mission and everything

works back from that. Every action works back to completing that mission. And that should be the way that you look at investing. But what I'm saying is just to add to that the reality that you're going to have emotions and what may some of those emotions be, it may be a form of greed that we call Yolo or you only live once or phomo fear of missing out. That's where you feel like I've got to get in today. I got to invest right now. Now, if you feel that about a stock, there's a very simple

solution. Just buy a little bit, okay? Save some dry powder because often the phomo happens when a stock has already run up quite a bit. And my advice is just scratch the edge, okay? Buy a little bit so that it's not bugging you, but save enough capital that if it comes down, you can dollar-cost average over time into a bigger position. But just, again, what I'm saying is,

“don't deny the emotion. The other thing that you have to consider is fear. And let's face it.”

You know, the media does a very good job offending the flames of fear. I'm not just, you know, throwing rocks from, you know, from an island. I participate in the media. So I see it firsthand. And if I take a look at a current issue, by the way, such as private credit, that's something that that's a story that is just tailor-made for the media. Because there's all these headlines about, you know, this company was fraudulent. And this executive says it's cockroaches. And this

fund is gating its investors. Okay? Those headlines are catnip for the media. And they're also catnip for your fear processors. So what I invite you to do is when you're feeling that fear is step back and remember what I just said that if you're in high quality companies, you're going to make it through thick and thin. In the case of private credit, that means you've got to be in the right managers. But you also have to think a little bit deeper about it. Now,

I'm not selling anyone on private credit right now. I'm just going to use the numbers. Private credit is roughly a two and a half trillion dollar market cap asset class right now. Above that, or rather below that, is about 10 trillion in private equity capital that has been deployed.

That would have to basically go to zero for there to be a systemic risk in private credit.

that one story. What I'm saying is acknowledge the fear. It's a real emotion. But then manage it. In the case of fear, find out the data. Find out things like how many of these loans are in nonacruble status. What's the loan to value ratio? When you get those data's data points, you start to get a lot more calmer. So that's, you know, again, just to summarize, the emotions are real. Don't deny them, but work with them. Yeah, I like that you said that.

I think in anything, whether it's starting a business, getting married, investing this idea

“that you need to allow the emotion. You need to experience the emotions. I think that's”

the first mistake is trying to act like somehow, you know, you see your favorite talking head,

talk about some stock they just invested in. And it's rip it. And now, I'll say, and you're like, like, that's a, I get it. I mean, there's probably no human in the world. Your self included. You see that there's some small part of you that's like, shit, I love to get in there. I mean, I love dogs. Great. But to your point, if it's not part of your long-term plan, if it's not part of your investment thesis, if you don't know the industry, right? And, and it's anything

other than some, and I'm interested in, and kind of how you, how you think about this and how you talk about it around like what percentage of your portfolio can you do that with, right? Like, is there some, is it five? Is it two? I've read all these different numbers. Like, where, okay, I see micron, and someone says, you know, before the big run-up, and someone says, hey, and I'm like, you know what? I'm going to take a shot at this, right? I'm going to take some small portion and

maybe it hits, maybe it doesn't. Like, how do you, how do we start to structure our decision-making so that maybe if we are the type of person that has to chase that, we're chasing it in a way that

“it doesn't blow our entire portfolio up. Yeah. So, I think, um, trying to answer your question,”

we can synthesize some of the things that we've been speaking about, maybe bring in a new concept. So, synthesizing the idea of long-term investing, we're not in this to get rich, quick, we acknowledge that there are going to be those moments where we have foam-o fear of missing out, and we want to get into micron. By the way, I just brought micron last week, okay, in the portfolio that I run, a relatively small position that I can add to over time. I actually think

it's fairly valued for the results that it's putting up. I think it's under-value to tell you the truth. But, let's face it. It's up about 600 percent since the last six or nine months, or so. So, it's not like I'm getting in at the bottom. So, again, synthesizing the emotions, foam-o, being in this for the long run, taking small bites, but let me add another important

critical element to investing, which is diversification. Step back, I'm an equity investor.

I'm very comfortable having all of my assets, my personal assets invested in equities. I actually grew up in a family of municipal bond managers. So, I was a died in the wall, conservative fixed income guy, but I realized at an early age that you can make more money over the long run in equities. And I'm very comfortable being 100 percent equities. Another client,

“another investor may not be that comfortable. And the worst thing as an advisor that I or anyone can”

do is give a client too much risk. So, I may be comfortable with it, but if another client is not and you get a downturn in the market, what they're likely to do is call it me or whoever the advisor is at the worst possible moment and say, you know what, I was up all night, I can't take this sell everything. And what that does Ryan is it turns a temporary loss into a permanent loss. And again, I've done these studies, the last five crises that have faced the market.

If you could just buckle your seat belt and get through it, your long-term results are fabulous, but you've got to get through it. And to get through it, you have to have the proper amount of risk, which means having some fixed income, if you're not going to get through those moments where you wake up in the middle of the night saying, what's going on in the world. There's another element. No, go ahead. Just give me one more second here. Yeah, no, go ahead. Maybe a few more seconds.

Another element of diversification, which I very much believe in, is not putting all of your eggs in one industry basket. Over the last 15 years, technology stocks have just shot the lights out. And it continues. And today we're talking about chips. Six months ago, we were talking about

hyper-scalers. You know, it's always rotating, but for most of the last 15 years, tech has been

the place to make money. Don't go to sleep on sectors like healthcare or energy or financials or industrials, because they have a way of sneaking up and giving you excellent returns when technology

stocks. And for most of the last 18 months, healthcare has been, it's been dead money. It's done

absolutely nothing. You know not when the time comes that that sector really catches fire. Obviously, we saw it earlier this year with energy, which if we go back a year ago, it was an untouchable sector. It was doing nothing. So make sure in your equity portfolio, which is a portion of your overall asset allocation that you're properly diversified into other

“sectors as well. Yeah, I think that's great. You know, I was as going to share a quick story about”

I really like Tesla, okay, for not just because of Elon, but for a lot of reasons. You know,

both, you know, highly technical reasons as well as just long-term value or whatever. And what's funny is, you know, I started investing in Tesla probably three or four years ago and just every month by a couple more shares and it's just what it is. And, you know, I looked like a genius and then the stocks split. It looked like even more of a genius. And then

“it's kind of sitting around 300, 400 and everything's good. And I just had a stock split and then”

all of a sudden, Elon joins Doge and it crashes down to what 140 or something like that. It got

down to. And now all my buddies are not all my buddies. My buddies that we talk about investing stuff. Oh, you know, how smart do you look now? You know, and I'm like, guys, what changed? Like, I'm just going to do the same thing. I always do. By share two every month. Like I do. I'm just going to keep going. Like what do I care? I don't even know. Yeah. I just don't even know the stock price was 140. And I didn't. I don't know. I just show up. I do my thing because to your point. And this is, this is where I want to go with this question. It's like, I spent time and built a thesis around that company that I really liked. And the portion of my portfolio. I wanted to be.

I said, okay, so if I'm sitting here and I'm listening to this show, how do I find the industries, the sectors that I should be investing. And I'm going to give a little more context this question and take a wherever you want. Like. Because because for me, at least I find and let me know if you see this with yourself or with others is like not only do I need to believe that it's going to be good long term, right, or work long term. But I also feel like I kind of need to be interested in it. You know, like if it's just some random manufacturing company like I used to own.

I I follow this one guy and I really like to thesis around glass and corning and and so I bought some shares. And like it's going up and everything he's you know slowly and just the way this guy said and that's all good. And I'm looking at it and I'm just like I'm bored. Like I just I don't care about corning and like it's nice to see the stock price go up over time. But like I just could care less about glass company. You know, like so I guess one in my crazy for that mentality and two. How do I kind of pick the sectors that I want to participate in? Because it does seem like you need to know a little bit or you get frustrated or you may not understand why a dive survey and comes back up.

Man, there's a lot to unpack a lot of good stuff to unpack and what you just laid out. Let's um let's just start with Tesla. It is exciting and I think anybody who's going to be an investor should be excited in what they're invested in. Tesla's incredibly exciting at least of all for the electric vehicles mostly for the Optimus robots for the artificial intelligence for the data collection from the electric vehicles full self driving all of these things. I mean, there's a lot to be excited about there.

And that's how I want investors to think. I go back 30 35 years to Peter Lynch very famous investor ran the fidelity Magellan fund. Looks a little bit like Andy Warhol or he did 35 years ago with you know the shock of gray hair. And he was adamant that anybody investing in an individual stocks should invest in something that they know that they use every day.

“Now today that might be an apple iPhone. I think back in his day he was talking about things like Coca-Cola start with something you know start with something you're passionate about. So that's the best way to get started.”

If I tell you um you know a stock that's boring to me is Proctor and Gamble absolutely fine company from a financial point of view. You know they make tied they make diapers and all that sort of stuff but I just can't get excited about it. It has a purpose in a portfolio. It's a stabilizer gives a decent dividend at over time it goes up but it is not going to excite you the way Tesla excites you. But the reason to have a Proctor and Gamble with a Tesla is because of what you just described Ryan about how Tesla is so volatile.

I'm in the ballpark that that return is so far in excess of the S&P 500 that I don't really know how to compare it.

But you only get that return by taking on risk by taking on the volatility that you so well described of hey you know he joins doge and all of sudden people are you know keying the cyber trucks. That was so stupid by the way but anyway um and the stock goes down below 200 and now it's above 400 you only get those returns by being willing to accept that volatility. Very strongly applaud you for closing your eyes your young man and you're just buying more shares as you go along. But for people who can't close their eyes who look at it every day and then like oh my god I can't believe what's happening to the stock.

Just put a little stabilizer in your portfolio. It could be a consumer good stock like I said Proctor and Gamble it could be a utility stock but just have something in the equity portfolio that's digging when Tesla is agging. And there's just no question that if you want the returns that a Tesla has given you you've got to accept that volatility. Yeah, I really like um property casualty insurance stocks as stabilizers like they're doing well. They just they just don't ever go down like they may not go up as much as others but like if you you know went and down pull out right like you pull back on their stock chart.

It's just every single one of them just incrementally slowly boring but just up into the right they just keep making more money. You know that's the hope then also that's my home industry like the industry that I came out of in the businesses I started wearing the property casualty insurance space.

So I always go that but I'm like I agree with you, but it's like to your point like find maybe find one that you are interested in right you can find find a boring stock.

You know one of those boring stocks that just kind of slowly goes up into the right you know those are terrible boring stocks and do that.

“Like just maybe find one I do think that's interesting and I think not a lot of people talk about that right like.”

I think not enough people talk about somehow having a connection to the stocks that you buy because it does that could be one barrier to the quick sell. Because you you're like oh I know these guys like yeah they went down a little bit but I know this business like it's coming back like I got it like it's good. If you don't know anything about it like again like I talk about corning. But again it's the company like it's the investment actually is probably fine but it's like I don't know how I ran impacts the glass production industry I don't know how natural gas production in the shell pits of Canada you know you know whatever increased the cost base like.

I have no idea so it's almost like you're you feel like you're flying behind now to that point I know you've you've talked a lot about individual stocks so far. What about ETFs like do ETFs play a role and and I'm interested because.

“In the sectors that I don't feel confident enough to pick an individual stock but I believe in the sector and I'll give you an example like quantum right about two and a half years ago.”

I picked one of the quantum ETFs I can't even tell you which one and I just started dollar cost averaging in it like I do with Tesla and. It's up like 75% it's insane. I have no idea what stocks are in there like in terms I couldn't tell you one individual stock but I was like I want to make sure that this quantum thing is real like if this actually happens that I'm kind of on board so. How does that fit in am I doing it the right way like you know like how do you think about these things yes you are so you just we're going to start by going back to your Tesla position.

Because you used a key term you said I have an investment thesis in Tesla and because of that I don't worry when the stock goes down I just buy more okay.

That's the critical starting point if you're going to going to invest in an individual stock is you have to have a well thought out investment thesis and you really need to do your research not just.

What a guy like me says about a stock on CNBC but really read the financial statements think about who the customers are and then go analyze those customers to see if they're healthy if they're getting benefits.

“In their business from using the products of the company that you're thinking about investing in now I could go on and on about that but the key point is you have to have an investment thesis.”

Okay that you get to a point where you're in a sector or you're interested in a sector that's somewhat esoteric like you're just pointed out about quantum computing. And let's face it I used to be a nuclear engineer I've got some particle physics grounding I couldn't I've read so much on quantum computing.

And so I can read all the financial statements that I want for these companies but I'm not going to understand the basic underlying engineering and physics that go into it.

“That reason it's far better for me or for you to use an exchange traded fund to express that theme without deciding if somebody's got the right particle physics interpretation and the other other company doesn't.”

So that's number one you get a theme yes use the ETFs there's also more course ETFs that I use from time to time.

So you may or one may think from time to time hey the financial sector is undervalued right now for whatever reason it's been oversold as it actually has been for most of this year.

And you've got all these catalysts coming the catalyst could be the coming IPOs of open AI and anthropic we've already had SpaceX it could be that the market hasn't interpreted or appreciated yet how strong the economy is it's worried about the consumer and high gas prices. This things may make a sector undervalued and instead of trying to read through the financial statements which for financial companies and you know this because this is your industry financial statements for for companies in the financial services industry.

They're like reading the Bible I mean they are long and long and long sometimes you just want to push the easy button and buy an ETF here's what I strongly suggest.

And you have to get the holdings of the ETF don't be surprised because sometimes an ETF can hold things you don't want to hold and you want to make sure that what's in that exchange traded fund really reflects those stocks that you mean to express in your investing. Yeah I one of the things that I was shocked about when so I'd say. Twenty seventeen twenty eighteen is when I really started taking investing seriously beyond just like dumb money in a 401k right and I started thinking like hey I this is my life this is my retirement this is money that I want to spend like I need to I want to be a little more actively involved you know I'm not going to become a financial planner but I also want to kind of understand what's going on all right so my my point saying that is.

And one of the things that I was shocked by when I started the day into ETF is how with very different names like if you just looked at the name of the ETF. They might have the same exact cross cut like you could think you're getting like small cap you know 2500 growth and you know growth global whatever and and they're like the same exact companies now you're buying two different ETFs with different management fee whatever you got going on.

“And you're essentially the same companies like you're not really diversifying so like you kind of like if you want to take ownership of this you really do have to dig that deep into.”

What's underneath because a lot of people just window shop to stuff I think that's exactly right and when you do dive deep not even that deep just look at the holdings of various ETFs somethings can surprise you so I'll just give you an example and I may touch a nerve with people who are listening I don't know but. Um ESG environment sustenance governance has been a theme over the last several years sometimes when I look at stocks that are in an ESG ETF I'm a little surprised. Now I haven't looked in a while but if I go back six years ago I might find X on mobile in an ESG and that makes you scratch your chin and say how how how does that get in there and it's because of the fact that they have some green initiative.

“But if you really think about a deeper I think what it is is the fund manager for that exchange traded fund saying look I think ESG is going to work but I have to have the core of the S&P 500 I have to have the core of the market overall in there.”

And so you would see stocks in there like a Microsoft as well now Microsoft maybe is not as a grejas and example is X on mobile but Microsoft I sort of scratch my head again and say what are they doing that is ESG they're really just a micro a macrocosm of the market overall and so you have to really look at what's in those exchange traded funds. I do you said and you know I love talking to you Ryan because when you set up a question you also you plant a seed and you did just now and I've got to come back to it even though it's not necessarily related to ETFs.

I think you were talking about your 401k I think that's yeah and you're younger than me you're you're young man you got a lot of run way ahead of you and I think a lot of your listeners may similarly be young and if there's a few principles in investing that I would want to impart get your retirement accounts funded early.

Grow without paying taxes year after year after year and just having seen it so much I want everybody who's listening to aspire to be that client who shows up when they're 60 with an IRA measured in millions. We have to do is just fund it now we can talk about hey should you be in this ETF for that ETF but given that this is money that most people aren't going to be touching for decades I just want these young people to put it in the market overall by the spiders by the S&P 500 depository receipts low expense and you're in the market for decades and decades to come.

Especially with like a 401k it's just it's like you can't beat the S&P 500 you know what I mean you can play around with some different stuff maybe but like it just seems like you're never you're not going to want to log into that account all the time you don't want to be changing the funds you're invested in it's like just you know it's it's another. I think you know one of the things. I want to take that idea and I want to kind of build on this idea of diversification because we talked a little bit in sectors but I'd also like to talk about it in terms of like vehicles so we have our 401k right and and I was always taught.

Put as much in as they'll match or you know as like a minimum so if they're matching 2% 3% 5% just do whatever their match that's free money do that okay great so I got my 401k bucket and then if I'm making under what I think what is it a buck 50 or buck 30 years and like that I can have a Roth IRA on the side as well I can also always have another traditional IRA and then I have individual accounts and then like we haven't talked about any like alternative investments like. crypto or you know physical physical assets like golden silver or even you know I got a buddy who's constantly trying to get me in this and we we don't can go here if you want to but he's got a SPV for private companies that he runs and he's always kind of trying to get me involved there and so like I.

“I feel like the sector diversification now I'm being very selfish with this question like I feel pretty comfortable with my sector diversification in terms of.”

doing research having a thesis okay but where I do get a little a. Is in vehicle diversification and what what that actually looks like and and how I should.

Think about the buckets the money is actually in right I like where you're going with this right and and I may I may torture the description a little bit you said vehicles I'm now really thinking about asset classes. We've been talking about equities that's an asset class we touched a little bit on fixed income and should you have that to help you sleep well at night that's another asset class but then you went into some of the critical asset classes of today's environment. What are you supposed to do about crypto about precious metals about private markets I think I'll answer that by just talking about what my firm how my firm is positioned right now and when I say right now this is how we've been positioned for several years.

And we do believe in the private markets so we believe in private equity private debt private real estate funds but I have to say this very clearly you have to make sure you have enough liquidity first you have to have enough liquidity to live your life and I'm also thinking about this in terms of what we were just talking about of retirement accounts because I do think about people who are listening to you and me right now and they may be saying.

“Hey listen man that's great the Jimmy lathe and thought thanks you should put as much as you can in your IRA but I can afford that I totally get that and I always want to meet people where they are.”

Do what you can however much you can put into an IRA or if you can start funding a 529 plan for your kids I'm just telling you that tax deferral is fantastic but please don't sacrifice your well being right now don't make yourself miserable. By funding what's going to come decades down the line and this is what I mean to call you off to you but I saw the stat the other day that was and I'm going to butcher it and I'm going to try to find it guys in post production but the essence of the stat was that.

The amount of people the amount of credit card like people are putting money in crypto and then running their life off credit cards was essentially what this stat was like they're like there's there and a lot of this is the younger generation like sub 35 there they're they're leveraging these like yellow type.

I don't know I want to get that down line I just I'll throw that in there what will it circle back to that keep going we better come back to that that's really important that that comes under the heading of speculative investment.

“Let's discuss that let me let me continue on the private markets for a second because what private markets do is they take out the randomness that comes in the public markets on a day to day basis.”

I'm a former engineer former nuclear engineer I drove submarines for the Navy and in that world if you pull a control rod out of a reactor by half an inch the reactor is going to respond the same way every time. The coolant is going to go to a certain temperature the steam pressure and the steam generators going to go to a certain pressure the turbines going to spin faster and you're going to reach a certain speed there's no question of what's going to happen. But on any given day in the public markets to plus two can equal five and there doesn't have to be any reason to it you were just using a great example with Tesla which goes from 400 to 140 to 400 to 200 that's not that's not a real measure of the company's worth.

What private markets do is it takes out those vagaries of the day to day machinations of the public markets and it just says listen we're investing in this company for the long run here's what we're paying here's what we think it's going to be worth.

And we'll get there when we get there we're not going to we're not going to measure it every single day and drive ourselves crazy.

That's a very important feature in an overall asset allocation because it dampens out volatility now somebody may want to say well geez I wish I could mark my own book of securities to whatever I wanted it to be.

“Okay you have to be with the managers in these funds that are noteworthy that are credible that have high integrity and a great track record and then just let it go for the long run.”

Also in terms of current positioning we do have a small allocation to gold right now gold I you know sometimes people look into this and say hey it's done so well over the last year two years and they think that it's an absolute return vehicle it's not for us it's a hedge it's a way of saying there's a lot going on in the world the changes on a day to day basis. I've been more than a few times in the last two years where the world has seemed to question US supremacy in terms it's a bad word I'm sorry US the reserve currency status of the US dollar and the status of the US treasury market as the risk free benchmark and as that gets question gold serves as a hedge what I call an end of days hedge.

But we're not saying that oh this is going to go up ten fifteen percent over the next year it's something to protect protect against on the downside which leads to a great question we're getting more and more speculative as we go on here Ryan. What to do about cryptocurrency because my rub against cryptocurrency is I can't value it and so if I were to tell you or anyone is a client hey we're going to buy crypto we're going to buy bitcoin today at fifty nine thousand dollars. You say that we're not done with the crypto winter yet and it goes to forty thousand dollars and you Ryan call me up and you say Jimmy why on earth did you buy it at fifty nine thousand dollars you did not want your advisor to lick his finger and stick it in the wind and say that's what I was doing I thought fifty nine thousand was good and I turned out to be wrong you want to have some sort of framework which in equity investing or fixed income investing you can look at a company you can look at a balance sheet you can look at cash flows you know this you ran a business and you successfully.

grow it and sold it you know there are metrics key performance indicators that you can look at that are absent.

In crypto I will be the first to admit that gold kind of has some problems valuing it as well.

“But I do want to have some hedge in the portfolio that's why we have that now let's go a little bit more into the real speculative stuff that you were alluding to where.”

People max out on credit card debt which usually is you know well over ten percent in the interest rate in some cases it can be twenty twenty five percent. So if you're doing that you're saying well I think the investments that I'm making and financing with credit card debt can do better than that. To which I say maybe maybe I mean there's been times where cryptocurrency has more than doubled in a year but you don't know when that's going to come.

And you don't know how far down it's going to go in the first place and you might lose your nerve and sell the the cryptocurrency or whatever the speculative investment is too early.

And now you're stuck with this enormous credit card debt. This goes back to what we were talking about with Tesla you cannot get return without risk they go hand in hand. So if you're going to do this using credit card debt you really have to have guts and I don't think most people have it.

Most people don't know how to handle leverage and they get called out they can get a margin call for instance when they least want to sell their securities. So I recommend not using leverage but let me close this on a positive note. There is room for speculation in anyone's portfolio you just have to keep it in really small size.

Speculation is basically buying a security on the presumption that somebody will buy it for you later at a higher price even though there's no framework for valuation.

If you have a framework for valuation you can say this is worth a dollar I'm getting it for 50 cents in the public market I'm fine with that. But speculation as you don't have a framework for valuation you just think somebody will buy it for you at a higher price that may come true it may not come true.

“I know plenty of speculative investments that have made money I know plenty of speculative investments that have gone to zero you have to size it properly and for most people.”

Well well below 10% of your overall net worth should be in speculative investments.

Yeah so I do I have done in the past I haven't taken on any recently a decent amount of angel investing and it's like the same thing you know I mean you're.

You know you maybe you're maybe you're betting on the founder maybe you're betting on the industry the products specifically the problem they're solving I mean but there's no. When a start up company hands you a deck and maybe they have customers maybe they don't you know at the angel level most of the time they don't like. That's pure undulterated speculation there is literally no way to know how valuable that company is going to be someday and like I know people and even myself maybe at different times that you get carried away right because you start creating all these scenarios in your head.

I saw my favorite influence on Instagram just told me Ethereum's going to 95 and you know what I mean this derivative product options call over here on you know or what was it the last one I read was everybody was was pitching shorting space X you know and it's like. Yeah but they're just guessing too you know I mean like I feel like there's like this somehow people think certain people just know what's going to happen it's like no maybe they're right more often maybe maybe they're experienced allows them to.

To make some calls that other people don't say but like. If you're the day we're all still guessing you know and like to your point and this is just kind of the way that I run things with my own investments is I just assume that I don't know shit. Right I don't know anything and I do research and I come up with a thesis I like to regardless of the asset or the industry or whatever. And then I just lost average in because like you said I have no idea like the idea that with all the things I'm doing and then insert everyone who's listening and all the things they're doing even yourself right it's like you can track every stock that exists and every alternate investment exists and every new vehicle is going to all this you can't so it's like.

“Pick some things and then just dedicate like I put twenty five dollars a week into Ethereum that's it twenty bucks a week that's what I do it's not a ton of money.”

I will never get super rich off of Ethereum but.

It keeps me involved I think the Ethereum is interesting I do think it has a chance to make a move it's a hundred bucks a month right like even if it hits it'll be a nice you know over the course of probably the five years it takes for Ethereum to really. Ethereum to really hit at some point like if it does ever like you know it's a small nice little thing but. I don't want it to be more than that and I have literally no idea when it's going to hit. I do think it'll go up I think it has utility I think that it's I think it's I think there's a lot of other things happening in the market that make it not as sexy or not as interesting right this second but.

Is it next week or is it a next decade I have no clue so it's like just put a small amount let it build up over time and if it hits banana you know I don't know it just you know I feel like sometimes.

“But if you just stop chasing I feel like things get easier not not easy not easy but easier I think the biggest.”

Investment virtue that somebody can have is patience so once you've done the investment thesis which also is its own virtue I mean to really dive into something. And I can tell from the way you're talking you know what you're talking about with the theorem I understand what you're talking about it has utility. To agree that Bitcoin doesn't have that ether network underlies a lot of applications that are going on right now I totally get it and you know on the other end of the spectrum I don't want to be in any of these alt coins which have you know a different name that you'll use but I won't.

That that's just ridiculous but patience once you've made your investment thesis stick with it now you know again the way you set things up Ryan you give me so much to work with.

And he was a friend and I really really liked him and when he died there was a financial autopsy and there was all this stuff.

“Okay there were all these investments in private companies that people didn't know about and investments in restaurants.”

And when you started to then have to value this as I and the accountants and the and the estate lawyers had to do you started to get in touch with the proprietors of the restaurants and the business owners and you've been one so you may know exactly where I'm going with this. That financial autopsy of my friend Fred showed what everybody kind of knew which he's he wanted to help people. He didn't want to just make money he saw people starting businesses and he wanted to help them and that that forensic that came out of it made me and everybody love Fred even more than we already did because of how much he just wanted to help people.

He also made sure he had a money to live his life and he wasn't betting his life savings on the local Italian restaurant that was just starting up.

But I want people to think about that and I kind of I'm sorry this is so macabre but think about if you were to pass today and your wife or your kids or your accountant or whomever are looking at your finances. Would they understand why you've done what you've done? Would they see behind it a noble purpose maybe that purpose is investing for the long run. Maybe that purpose is as I've said helping people out as they're starting businesses maybe it's patriotic I'm not going to wave the flag here but there can be any of a number of reasons but your portfolio is a fingerprint of your personality it really is.

“I love that idea and I completely agree with you I completely agree with you and I think.”

You know just again speaking for myself one of the reasons why I feel comfortable with my spread and where my I have various investments.

For that reason like and it wasn't always this way I mean it's it's been years and years to get to this mentality but like.

The things like I could give you a reason like if you said why this why this why this I could give you a reason for every one of them and I literally wrote down like. If you're creating a little investment narrative that I could throw up on Google Drive and if something ever did happen to me you know now my family my kids or whoever could go and read it and go. Oh one we kind of know everything that he's got and two this is what he was trying to do and what he was thinking when he did it like. Do you think that's a valuable exercise I do it for myself I have a journal of my investments and what's behind it.

Now it's it's a little bit in shorthand I'm not going to take the time to write prose but I do that because it also helps me you and I have both spoken about an investment thesis in anything we invest in and having to go back to that when the when the stock goes against you. If you've written it down it's so much easier to understand. I also do this now this is I'm a stock analyst at heart so when quarterly earnings comes out come out.

“I make it a point of getting on the earnings call and writing up what I think of the earnings call right there and it go back to it from time to time because there are times where you're shaken in your investment thesis.”

Try and you're clearly a risk taker nobody starts a company the way you did without being comfortable with risk but I'm sure there are moments where you woke up in the middle of the night that 3 a.m. wake up and you're like what have I done what have I done and you do have to have some stability some core of rationality and if you've written it down it becomes that much easier to understand why you've done what you've done. I love this idea of an investment journal where you know like you said it did you're not doesn't have to be you know three daily pages or whatever but you know just anytime you make a substantial investment or a decision right you just write in your thought processes to why you did it like.

I would say hey I could describe to you today why I'm in all these places but maybe in truth I don't know that I could articulate my exact thoughts at the moment when I decided to make it right just because of time and I don't have it written down like I have a high level idea but like I couldn't reproduce the research for you as to or the websites I went to or the you know what I mean like. I just have the high level idea in my head still and I like this idea of just keep it under your desk or whatever and even if you make one big investment a year right you just here's why here's what we're doing here's the thought processor.

The next idea that you get you could go back through and look at your winners and losers and say what was I thinking what was I possibly missing and then apply it to maybe make a smart decision the next time. So Ryan it will also show you your evolution as an investor I started doing a journal when I was doing a lot of trades and history shows and my own personal history included that doing rapid trades generally is a good way to lose money.

It's not it's not the way it's not the tried and true way.

“I think a lot about the day traders from the late 1990s some of them are still around but most of them just eventually lost all their money.”

As I started writing down my trades in a journal I realized I was trading too much it was it was great to just have that feedback of slow down you're doing too much. There there are principles like that things to consider not just in terms of the frequency of trades but a lot of people today think that the options market is going back to where we started with everybody has this. This this reality that may be I'll use alternate from real reality. I think you said false there's this idea that with options people can get rich. No. There's some stat that 95% of options that are ever issued expire worthless.

But it's just it's a speculative way of people to gamble. It's gotten even worse as time has progressed to the point where today there are these options called ZTE zero time to expiration options.

You can buy them in the morning and it's a bet on where a stock or an index or a sector will close that day. That is not investing that is being in an alley rolling dice with a bunch of other guys and the house makes money but the investors don't I wouldn't even call them investors that's speculation. Writing things down is a good way to evaluate where you are and see yourself evolve over time as an investor. I think when most people do that.

“They get to the point where they realize the most success is picking high quality companies good management solid balance sheets.”

Defensible. Moats to competition not perfect but defensible enough and sticking in it through time through long periods of time and one going to go back to patience here for a second.

Some of my best investments have taken a long time to play out and I can list a few right off the bat city group. I'm currently in Cisco systems is another one. We're for long periods of time they just lay follow and they were so cheap you were scratching your head am I wrong about this you go back to your investment thesis which you've written down.

“And it realized no it's just the market getting it wrong and then when it hits it more than makes up for all that time that you had to wait but you have to be patient and being patient helps if you've written down what it is you're doing.”

Yeah best investment I ever made in my life was waste management I bought it at thirty one dollars and twenty ten and dc eight in for about four years. And I think it's like 175 now one almost 200 it just kept going up and up and up and up and it's like in funny guys if you're listening again I'm not not a professional investor in any regard and I've had just as many not do what waste management did so just be clear listen to Jim don't listen to Ryan. But we can listen to you you you you you you know what to talk about but the idea to your point of like I was living in the city of Albany at the time.

And like like any city garbage is a problems garbage everywhere and the waste management trucks would come by and then I saw like a different type of like another company go by and I was like okay. One I didn't even realize there were multiple garbage companies again this is twenty ten I'm fifteen sixteen years younger so take that for what it is. And I so I started looking at waste management I realized they have more available landfill space left than any other publicly traded garbage company and I was like well we're never going to have less garbage.

So it's got to go somewhere and then the other thing that I liked about them was they were leading in turning the methane from the finished. Um, landfills into renewable energy into internet and energy and I was like oh so they're actually making money twice on the garbage like.

But to your point like it's that patience and having the thesis and I think you know the maybe the biggest takeaway for this at I like step one level is.

“The notes and like have a plan or you know before you invest in something versus just my buddy on the golf course told me I should invest in Coca Cola this month so here we go you know like.”

It's not meaningful to you right so we already we talked about just recap here like it should mean something to you unless you're a big coach or I guess and then like you should have a thesis why you're actually doing it how it fits in and then my my question here then becomes okay so I. I tend to be someone who likes to do it myself a little more.

I do have an advisor that I will go to but he doesn't have a ton of my money mostly just my roleovers from other like businesses that I worked in.

But like how do you interact like for you what is what is the most successful relationship look like when someone works with you directly like. How do they communicate with you how do they what do they need to share with you so that.

“Together you guys can create the best results let me start with what I think the most important thing I do as an advisor is.”

I'm surprised you based on what I've already said it's hold people's hands during a downturn and get them through. If we you know we can go through any of a number of crises if we look at where stocks bottomed out and a great financial crisis and covid. The right thing to do was to hang on to where we are now people often say hey how can I invest now the markets at an all time high the market is always hitting an all time high sometimes it spaces out time between that but that's.

That's a feature not a bug is that you're hitting all time highs so the most important thing that I do is hold people's hands through a downturn for that to be effective.

They have to trust me now this is this is I don't want to get smart me here.

“Trust is in my opinion the currency of my industry it's the most important thing but it's not something.”

If you and I if you were interviewing me as an advisor Ryan and we've just met and I said I want you to trust me you'd be like dude like I don't even know you don't don't start with that trust is something that takes time to build. And it's unfortunate because I have had times where I've started with a client new client just before a downturn and it's very hard to get them through it on the other hand if I look at the last 18 months. Casting politics aside we've had a big downturn because of the conflict with Iran and then a year before that we had a big downturn because of the tariff liberation day.

Most of my clients who have been with me for 20 years or more I call them up and they say I'm not worried I know I know how this the experience gets you through this. In both of those instances the snapback was pretty pronounced faster than I thought it would be but the point is still made that it's just a question of when the markets come back not if. So the most important thing that I can do with a client is take the time to talk to them get to know them I'll meet with clients often I'll meet with their family members you really have to establish that bond because you can't just ask for trust you have to deliver something that makes people trust you.

Unfortunately it really takes time. Now let's talk about time for a second I'm going to segue into something that's maybe not directly related to trust but you've mentioned it a couple of times and I think it's an important topic which is DCA or dollar cost average and it is it is somewhat involved with trust because the dollar cost averaging folks is when you say I'm going to get into the market or a particular stock but I'm going to do it in segments over time. I personally believe that you should really dog madically lay that out so if I'm going to invest a hundred thousand a million dollars into the market I'm going to do it over three months and that's going to be four equal tronches of 250 thousand or twenty five thousand dollars whichever number you're using starting now then one month after that then one month after that and one month after that I'll be finished.

It's very important that you do it dog madically because what it does is it takes some of the psychology out of investing people get worried hey if I buy something today the stock market I'm not going to look right now maybe it's one percent off of it's all time high. I don't want to put it all in and then see it go down no matter what Jimmy says about will be fine for the long run I don't want to see that that's going to upset me psychologically. Dollar cost averaging makes sure that you don't drop all of your money in at the worst time it also makes sure that you're not going to buy everything at the perfect time but you're going to have some of each of that.

The numbers actually say that you're going to do better just investing all at once yes once in a while it'll go wrong but over time it makes up for it still as an advisor and this does have to do with how you establish trust. You meet people where they are you understand their human beings with emotions you empathize with them dollar cost averaging DCA was the abbreviation for it. That's a good way to just get people comfortable with investing and with you as an advisor. I like that a lot and I like that you that you agree with that philosophy because I agree like so much of investing for me has been like this is going to sound weird and again not a professional but just the way that my mind works.

I kind of detached from the outcome not on a on a on a micro basis on a macro basis the outcome is incredibly important but on a micro basis I kind of just.

I like again I committed to this thing like my theorem right so so every week 25 bucks in Ethereum I couldn't even tell you how much Ethereum is today right I have this thing I put it in every day in that way my brain just goes 25 dollars every week to Ethereum right it's a hundred dollars a twelve hundred dollars year you're not getting super rich but you believe in the thesis and look if it does go from 2000 or 1900 or whatever it is today to 95 thousand. That's a nice little hit off things considered I'd like to be a part of that but that seems like a very small percentage happening so this this this kind of.

“If it goes up to 3000 and I make a couple twenty five dollar investments at 3000 or you know make it a hundred or whatever whatever you can afford right it's not the only thing I'm DCA that's why it's allocated that way.”

But like it just there's not that like I'm not as emotionally connected to the outcome of each individual investment that way like I feel like.

Just oh that one it was up a little bit okay a couple weeks later it's down okay I got a couple investments in when it was down a little bit alright you know like it's. It's just like I say I just agree with you so much it takes so much of that emotional toil out of the process and Ryan you you're the degree to which you are an objective person is way outside what the average person is. And I'm I'm saying that not to compliment you but to level set for the people who are watching us today if you're listening to Ryan saying I want to be like Ryan hey you know what I do like you you sound cooler than me by a lot.

You are objective and I've listened to your podcasts I mentioned earlier you know the one you did on 72% of your work gets you is not in your flow state and you got to work on getting in that 28% if you listen to that podcast what you hear is an objective person saying.

These are the rules to get you where you've got to go and I'm even thinking about the three rules you had about where AI can take take over a task for you.

It's very it's very thoughtful it's very objective it's very clear most people aren't like you most people watching are watching you Ryan because they want to learn to be like you this dollar cost averaging and many of the principles that I'm talking about. Folks, I'm just trying to help you be like Ryan in terms of how you invest Ryan you don't need me to tell you these things you know these things. The emotions are there this is where we started the emotions are real I feel them.

“I think Ryan you're able to control your emotions better than me I think I'm able to control my emotions better than the average investor by a meaningful amount.”

Some just another principle that I want to share with you and I know I'm jumping around here, but it's an important principle about market timing. We already talked about it I've said it many times just stay in the market I want you to think about the damage that can be done by getting it wrong with market timing. If you look at the last 30 years of investing the annualized return on the S&P 500 is about 9% which is pretty darn good. If you missed the 20 best days in that 30 years your average return goes down by more than half you're about 4%.

It's a dramatic just for 20 days. Now that doesn't mean that the 20 days are once every year and a half they happen when they happen.

“Here's the worst thing and here's why emotions and here's why objectivity really matter is that those best days happen to be clumped.”

Happened to be clustered right around the worst days. That's the way it works is after a meaningful market downturn you get these bushes to the upside.

Every emotion is going to say don't invest because it's just been a bloodbath in the markets. Objectivity really matters here objectivity really matters. Yeah and why I appreciate your kind words. I will say that my approach to investing is because I am like a highly emotional person like this is how I had to set the guard rails up because otherwise.

I would be in there every day looking at the stupid thing watching it take up and down by the second.

Just talking about timing I have this horror story at a friend who worked for American Express in New York City.

“During the financial crisis and I think my butch of this a little bit I think American Express was somewhere like in the 90s to around a hundred dollars a share.”

Pre financial crisis financial crisis hits it goes all the way down to three dollars a share. He sells at five dollars a share six months later it's a hundred and twenty dollars a share.

That's a painful story to hear.

I want to see a grown man cry on golf course have him tell you that story. I mean he'll tell he'll start crying today when he tells you about it. I mean hundreds of thousands of dollars because he thought. The credit you know he bought into all the craziness the credit you know the world's going to crab the credit systems done no one's you know they're going to.

They're going to close American Express you know all these crazy stories right and to everything we talked about why I love this conversation.

Is that I feel like like the core thesis of what you've described and laid out is is how to approach investing in a rational objective not emotional way as much as you can. And like like I I hold that story and I tell that story only and I feel horrible for him.

“He's very smart and is made plenty of money his life is not he's not destitute but like.”

At the time that was an enormous hit I mean that was like half of his personal wealth was in that once because that's where he worked and he had to keep you know taking. But as shares with the paycheck and all that kind of stuff and I mean that's just that's what happens when you let your emotions get to you right I mean if he believed in the company he worked there. You know he weighed six months just holds on for six months and literally is stock is worth more than before the crisis and or you know I may have been longer than six months but it was somewhere it wasn't longer than a year.

Oh my god I just to this day I think about that and I'm like what are the cryptos called diamond hands got to have those diamond hands got to have diamonds and you're in this game it's crazy. And total that's right and hold oh yeah I love these new words. This is something and please. Hey everybody's going to make a mistake everybody and you're going to learn from the mistake so what you know when you're feeling like you want to cry because an investment you just got it totally wrong just learn from it.

You can cry if you want to but learn from it and you will see pattern recognition the longer that you invest it's why I want to get people investing early you'll see the patterns that whenever the media is telling you that the world is ending because of tariffs or world war three or whatever that it doesn't come to pass. And I was as you were describing American Express in the great financial crisis I remember being scared there I remember thinking like we're going to go back to a border system here at the rate things are going.

It reminds me of a funny story at least I find it's funny from the 1950s New York Stock Exchange all of a sudden stocks go down one day they go down hard and everybody's asking what's going on it somebody says well we just heard the cruise ship launched an ICBM attack on the US. Now this story is a little bit apocryphal but let me work with it and some some smart older man goes to his younger clerk he says go buy everything you can right now in the stock market and the clerk looks didn't miss what are you what are you talking about we're about to have the world and he says look one of two outcomes either it's a rumor in case in which case we're getting everything on the cheap right now or the world's going to come to an end and it doesn't matter.

A little bit witty okay but here's the real message how many times have each of us heard in our lives that the world is ending that that tariffs are going to undo the world order the world trade order that America is losing its standing in the world I'm not being politically here I'm just saying asking how many times have you heard that back in 2022 Russia invades Ukraine and all the talk about nuclear war world war three.

“For the number of times that we have all heard the world is going to end you know how many times it's ended exactly zero so odds are you shouldn't believe it when you hear that yeah I I I I completely agree I think it's.”

It's funny I did this is golf topic but like I get I get a lot of hate because I'm a big AI optimist huge AI optimist I and people are like whoa you know.

In that case being pro AI doesn't matter or AI works in our favor and it's all upside and you ride this wave and you have a chance to really take your life for your business and move it to all the level like what like sometimes I look at these things and I'm like.

“So the worst case happens we're all F to begin with so what do you know I mean like why would I even consider that option like what am I going to do like you said if the world's on fire and we're launching.”

God forbid you know missiles at each other like I'm not really going to care so much about how you know my Tesla stock is doing.

My goodness not really going to care as much like that's not going to matter where. If that doesn't happen and AI does become a very positive influence and self driving cars do reduce deaths on the road by. The you know millions of people that are injured and die every year and all of a sudden the world's a safer and more energy efficient place because of all these you know new technologies and new you know medical healing and all this kind of stuff will. I'd rather just I'd rather tack towards that future and just deal with you know we're in a terminator style post apocalyptic AI war you know I'll just deal with that if it happens and you know futures this way I just don't understand I don't I just don't understand I understand it but I don't.

Relate to like the scarcity mindset kind of fear driven stuff and it's like if you can start to create these reframes I feel like not just with investing but with so many things in your life you can like reduce the all these tension filled brain cycles that you take because it's just like. So the worst thing happens well then we're all screwed but otherwise like why not just why not just plan for the good outcome because if that happens that you you know you're looking at huge huge returns I'm with you on the good outcome both generally and specific to AI.

I also want to point out that the corollary to what you described is this nostalgia for times passed that tends to idealize what really was and I like to read Walt Whitman and I absolutely love the Hudson River school of painting which is mid 19th century landscapes I find it just gorgeous.

“But here's the truth as much as I might say well I wish I were back there myself I'd have to worry about dying from smallpox or getting mold by a bear things that I just don't have to worry about today because technology has advanced.”

And I agree there is there is something nostalgic about those paintings I love them but I live a more comfortable life today than I would have 200 years ago with AI I don't know the specifics of how it's going to turn out. There's a lot of concern about job losses there's an analogy I've been using that I find really quite pertinent if we go back 30 years ago mid 1990s digital technology was really just getting started think about the internet think about data storage. The company's right and this may be before your time I'm not quite sure how old you are you don't have to say but there was this company called EMC which it business was selling data storage which is hilariously quaint today which you know and I phone can store all the data needed to launch in Apollo mission today.

And the data was scarce back then and fiber optics were being laid so all this data could be transmitted efficiently what this meant is that trading on the New York Stock Exchange changed dramatically it was revolutionized and whereas 30 years ago there were 5500 people on the floor of the New York Stock Exchange today there's about 300 people and I know this because I go do CNBC shows down there about twice a week and so I see it.

“It's a ghost town now one might think well this is terribly tragic all those jobs were lost and think not just about the New York Stock Exchange but the same thing happened at the American Stock Exchange and that the Chicago board of options etc.”

Yes it did but here's the punch line over the last 30 years employment and financial services has gone up by 20% inclusive of the demise of all those jobs that is creative destruction and there is destruction so there aren't as many New York Stock Exchange for jobs but there's all these new jobs financial planners performance reporters high frequency traders you may not like high frequency traders but it's a job that did not exist.

Before all this data became cheap and the ability to transmit it became effortless so jobs are destroyed but more jobs are created that's what will happen with artificial intelligence.

actually done that but they referenced that AI is one of the things now what none of them say is how many of those people immediately found new jobs in the same field they never talk about how many of those people immediately found other jobs that just are different job title. They also never take into account the fact that most of the time and in my personal opinion most of these companies are using AI as an excuse to get rid of employees that they felt were bloated anyways which in most of the companies they are and like.

“you never get the full picture it's just someone you know insert company name that people know they're the word AI was used in the announcement and they dropped you know X tens of thousands of people and therefore AI apocalypse I'm like.”

I have like three buddies who have who have like blue collar jobs that are building startup little app companies and different things in there on the side now that that you know I mean so like there's all this additional newcomers that's being created by the new opportunities that I created so it's like I just look at it all and I go.

It's like a new benefit unless you are some sort of like crazy short seller there is no benefit to the to operating the scarcity mindset version of this stuff like.

It's bad for everybody but if you're properly positioned on the on the optimistic side that's where you're going to capture all the value at least that's that's kind of the way that I look at the world is I just.

“If there was a positive to over indexing on scarcity and negativity and fear then let's do that but I just don't see the data points to support that type of mentality I just I'm.”

The data supports you strongly consider that we're coming up on the fourth anniversary of chat GPT being launched four years and for all the talk about how many jobs are going to be destroyed by it.

We've got unemployment here in the United States at about 4.3% we're going to get a labor report in a couple of days it's probably going to be positive again. The initial weekly jobless claims have shown no uptick and firing the the I like your term fear porn I'm not going to use names but there was a research and for those of you who are listening and not watching I just put air quotes there was a research article that came out in February that started with the line we are not engaging in doom porn which was then you know that was a that was a.

A spoiler alert that that's exactly what they were about to do and they predicted that in two years unemployment would be above 10% and no companies would be making any profit I can look at the soft publicly traded software companies which have been beaten down badly this year on the fears of AI and in particular that research report.

“They are still growing their top line their margins have gone down why because they're investing in AI they're doing exactly what you're doing right and they're embracing the future.”

And so instead of just getting run over they're co-opting AI and they're going to be better for it as they're still growing their business don't give into fear we talked about that earlier it's a real emotion don't give into it history shows that that's the wrong thing to do. Jim I can talk to you all day man I love this conversation I love your mentality this has been such a great conversation. I know my audience is going to want to go deeper into your world. We'll have links to the book but besides the book where else where else should people go and guys whatever Jim references here I'll have it whether you're watching on YouTube or wherever you listen to the podcast.

I'm just scroll down in the description you'll find it sure so I'm I'm a partner in our chief investment officer excuse the chief market strategist at serity partners.

C-E-R-I-T-Y partners dot com you can find me there but probably the easiest way is if you watch C-N-B-C two to three times a week I'm on the halftime report which is from noon to one. It's a very vibrant show it's kind of a talk show radio or a sports radio meets finance very vibrant we we have a lot of robust discussions and that's a good way to get to know me as well. Yeah I love it. I love it. Thank you so much for your time this has been absolutely phenomenal and anytime you want to come back on and talk about this stuff you got open invitation my friend.

I could listen to you all day long and in fact I have been you're something special thank you Ryan. Thank you so much.