My Worst Investment Ever Podcast Kenny Rose – Don’t Invest in Anything You’re Not Fully Educated In
BIO: Kenny Rose is the Chicago-based founder and CEO of FranShares, a platform that democratizes franchise investing.
STORY: Kenny invested in an aviation stock and hit the jackpot. Feeling lucky, he invested in a company dealing with processors and microchips, an industry he knew nothing about. He bought the stock at $4. About a year later, the stock went down to $2.50. Kenny panicked and sold his stocks. The stock is trading at over $100 today.
LEARNING: Before you invest, think about how much you’re willing to lose, what your time horizon is, and what your maximum loss might be. Educate yourself about what you want to invest in. Outsource what you don’t know to professionals who know those spaces better.
“Be educated, pick an investment style you know, and stick with it. Outsource what you don’t know to professionals who know those spaces better.”
Kenny Rose
Guest profile
Kenny Rose is the Chicago-based founder and CEO of FranShares, a platform that democratizes franchise investing. With over a decade of experience in the franchise industry, Kenny has worked with over 600 franchise brands in more than 100 industries. He is an expert on franchise evaluation and has helped individuals identify the best ways to deploy capital into franchise ownership to maximize return on investment and operations.
Kenny founded FranShares to allow individuals to invest in a diversified portfolio of franchises with as little as $500. Backed by Chicago Ventures, his platform aims to create passive income streams for investors.
Worst investment ever
In 2013, after Kenny graduated college, he became a financial advisor at Merrill Lynch in San Francisco. At the time, American Airlines and US Airways merged. The Justice Department challenged the merger, and both stocks plummeted. US Airways stocks went from $2.50 to about a quarter per share. Kenny had a bit of knowledge of the aviation industry from his pilot brother. So Kenny believed that the government would eventually allow the merger. He threw every nickel and dime he had at those stocks. As Kenny had predicted, the deal went through, and the stock went up to $12. It was an absolute home run for this young graduate.
Kenny was feeling very proud and excited about his next big investment. He talked to another financial advisor, a friend of his, who asked him if he had heard of AMD. Kenny hadn’t heard of it but was curious to know more. The friend told him about the world of processors and microchips, which Kenny found fascinating.
Though Kenny didn’t understand most of what the friend was saying, he was interested in the investment bit. He bought the AMD stock at $4. About a year later, the stock went down to $2.50. Kenny panicked and sold his AMD stocks. The stock is trading at over $100 today.
Lessons learned
- Before you invest, think about how much you’re willing to lose, what your time horizon is, and what your maximum loss might be.
- Educate yourself about what you want to invest in.
- Pick an investment style, and stick with it.
- Outsource what you don’t know to professionals who know those spaces better.
Andrew’s takeaways
- Build a diversified portfolio either of individual stocks or an index.
- Stop and think about how you will build the habit of learning.
Actionable advice
Do not invest in anything you have not become fully educated in.
Kenny’s recommendations
If you’re interested in the franchise world, FranShares has created an investor guide to help people get educated on franchises. Kenny also recommends subscribing to the ExecSum newsletter by the financial meme group Litquidity. The daily newsletter curates major news from Wall Street to Silicon Valley, with a touch of humor and memes.
No.1 goal for the next 12 months
Kenny’s number one goal for the next 12 months is to bring on another 10+ franchise brands and get FranShares to 100 million in gross investment volume.
Parting words
“Keep an open eye; you never know what’s good until you research it. I think people like to hop on the ball that’s already rolling instead of rolling up their own.”
Kenny Rose
[spp-transcript]
Connect with Kenny Rose
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- The Become a Better Investor Community
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- FVMR Investing: Quantamental Investing Across the World
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
- Achieve Your Goals