My Worst Investment Ever Podcast

BIO: James M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and investing in residency after getting ripped off by every financial professional he came into contact with. He founded The White Coat Investor in 2011 to help fellow docs get a fair shake on Wall Street.STORY: James got sold a whole life insurance policy in medical school. He invested in it, thinking it would be a good option, only to realize seven years later that it was not. When he pulled out of the policy, he lost 33% of the premiums he had paid.LEARNING: You must understand anything you buy. Don’t buy more insurance than you need. Focus on one catastrophe-related insurance product that’s reasonable. “Insurance is expensive, so don’t buy more than you need.”James M. Dahle Guest profileJames M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and investing in residency after getting ripped off by every financial professional he came into contact with. He founded The White Coat Investor in 2011 to help his fellow docs get a fair shake on Wall Street.Worst investment everWhen James was a medical student with minimal income, a friend interning with a large mutual life insurance company convinced him to buy a whole life insurance policy.Looking back, what James really needed as far as insurance went was a term life insurance policy. At that point, he was married with no kids, and his wife was designing her life around his financial future as a doctor. The insurance policy James invested in, partially as an investment, was a whole life insurance policy. He held on to that policy for about seven years when he realized this was not a good deal for him. Not only was it not the insurance James needed, but it was a lousy investment.By the time James surrendered that policy, his cumulative return was minus 33% of the premiums he had paid. So he walked away with only two-thirds of the money he had paid into it.Lessons learnedYou must understand anything you buy, especially if it has a long commitment.Don’t buy more insurance than you need.Andrew’s takeawaysFocus on one catastrophe-related insurance product that’s reasonable, find the best price on it, and set it up to protect your family against that catastrophe. Then, build a solid investment plan with the remainder of your money.Actionable adviceWhile you don’t want to get paralysis analysis, you do need to take the time to understand what you’re buying, whether it’s an insurance policy or an investment. You need to know how it works and how it’s likely to perform over the long term so you’re not disappointed and end up bailing out.James’s recommendationsJames recommends evaluatelifeinsurance.org if you’re already in a whole life insurance policy and trying to decide whether it’s worth keeping it, even though maybe you shouldn’t have bought it originally. He also recommends the Fire Your Financial Advisor, designed to help you write a financial plan to go from zero to 60.No.1 goal for the next 12 monthsJames’s number one goal for the next 12 months is to help as many doctors as possible reach a situation where they feel good about their finances, whether that’s achieving financial independence or just feeling like they have their financial ducks in a row. James wants them to be able to quit worrying about their money so they can concentrate on the things that matter most in life.Parting words “Keep your head up and your shoulders back. You’ve got this.”James M. Dahle [spp-transcript] Connect with James M. DahleLinkedInTwitterInstagramFacebookYouTubeWebsiteBooksPodcastAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades.STORY: In 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. When COVID came, the stocks went south, causing Harley to make his biggest loss ever.LEARNING: When something trades well below what you think its value is, consider why that’s the case. Size the investment. “Forget timing; size the investment. Pick the size such that you’ll make enough if you’re right, and if you’re wrong, you won’t get wiped out.”Harley Bassman Guest profileHarley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades. He spent 26 years at Merrill Lynch. From 2014 to 2017, Harley was an Executive VP and Portfolio Manager at PIMCO. In 2011, he joined Credit Suisse’s Global Rates. In 2006, he built the RateLab, a full spectrum US Rates Trading Desk Strategy Group.Presently, Harley is a Managing Partner at Simplify Asset Management. He continues to pen an episodic macroeconomic Commentary as well as manage a “hedge fund of one.”Harley has a B.A. in management science from the University of California, San Diego, and an MBA in finance and marketing from the University of Chicago.Worst investment everIn 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. Harley put more into this trade than he logically should have. He was hung up on the value construct and wasn’t thinking about why the stock traded under tangible.When COVID came, the stocks went south, causing Harley to make his biggest loss ever.Lessons learnedWhen something trades well below what you think its value is, consider why that’s the case.Size the investment. When you make an investment, invest enough so that your gain can be worthwhile.Sizing is more critical than entry-level.Andrew’s takeawaysBe very careful when investing in banks because if their equity gets hit, the value of their assets could fall.Actionable adviceDon’t fall into a value trap. Be careful of single names because there’s always a lottery effect that you can never predict.Harley’s recommendationsHarley recommends reciting his Maven mantra: Number one, it’s always about character. Number two, it’s never different this time. And number three, you’re born, you live, and then you die. Prioritize your life.No.1 goal for the next 12 monthsHarley’s number one goal for the next 12 months is to focus and spend more time with his family.Parting words “Just be careful and stay safe.”Harley Bassman [spp-transcript] Connect with Harley BassmanLinkedInTwitterBlogWebsiteAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Mike Philbrick is the CEO of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership.STORY: Mike learned of a mining stock at the urinal. He invested, and the stock performed well because the mining industry was on fire. And so encouraged by early success and massive ignorance, Mike wiped all of those gains in no time.LEARNING: Don’t over-leverage. Understand what kind of investor you are. Ensure you have some protection before you go all-in in an investment. “Just because you’re winning doesn’t mean you’re smart or you’re good at these things.”Mike Philbrick Guest profileMike Philbrick is the Chief Executive Officer of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership. He has co-authored the book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad (Wiley), as well as several whitepapers and research focused on adding new insights to the quantitative global asset allocation space.Adaptive Asset Allocation and Return Stacked Portfolio Solutions have been popularized by him and his team at ReSolve.Preceding his investment career, Mike played professional football in the CFL, winning the Grey Cup Championship in 1999 and being inducted into the Hamilton Tiger-Cat Walk of Fame in 2015.Worst investment everBack in the early 90s, there was a lot of mining going on in Canada, and so mining stocks were becoming popular. Mike had started noticing the stocks but had yet to invest. One day, he’s at a urinal, and a guy tells him about a particular mining stock. Mike figured it was a good idea to invest in the stock. He didn’t do any research; he just took the man’s word for it.The stock wins, and Mike gets a couple more wins from the stock, not because he was a genius but because the mining industry was on fire. And so emboldened with early success and massive ignorance, Mike wiped all of those gains in no time.Lessons learnedUnderstand what kind of investor you are. Can you withstand a 90% decline?Can you buy something and then ignore it long-term?Don’t over-leverage.Andrew’s takeawaysEnsure you have some protection before you go all-in in an investment, particularly when you don’t know much about it.Actionable adviceAlways remember that you don’t know as much as you think, so take different approaches such as diversifying, being less confident, managing risk with stop losses, or managing risk at the portfolio level on an ongoing basis. You don’t need to own more of what’s going well. Just do less of what’s dragging your portfolio from a momentum factor that enhances returns.Mike’s recommendationsMike recommends his book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad, which goes through steps that you would take to maximize diversification and how to use the factor of momentum to enhance that.No.1 goal for the next 12 monthsMike’s number one goal for the next 12 months is to get his firm 1.5 billion dollars in assets under management.Parting words “Stay true to yourself.”Mike Philbrick [spp-transcript] Connect with Mike PhilbrickLinkedInTwitterYouTubePodcastWebsiteBookAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever PodcastFurther reading mentionedRobert M. Pirsig, Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values.

BIO: Sam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors.STORY: Sam decided to short-sell options that went horribly wrong after the Russian default. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.LEARNING: Understand what you’re really betting on. Every option trade is about volatility. Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening. “There often are hidden drivers of an investment that are not what you think they are.”Sam Burns Guest profileSam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years now, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors. After spending many years doing research at firms like Oppenheimer & Co, State Street, Brown Brothers Harriman, and Ned Davis Research, Sam founded Mill Street in 2016 to be able to bring all of his best work together and offer it to clients without any constraints or conflicts.Worst investment everSam had been trading options for a while, mainly from the long side, buying puts and calls, which, at the very least, has a limited risk aspect since you can only lose what you put in. At some point, Sam decided to try short-sell options, which went violently against him.This was in August 1998 when the Russian default set off a chain reaction of problems and Long-Term Capital Management blew up. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.Lessons learnedEvery option trade is about volatility.Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening.Ensure you’re capitalized well enough to handle or ride through ups and downs and drawdowns.Andrew’s takeawaysUnderstand what you’re really betting on.Actionable adviceMake a point to think through what’s behind an investment and understand the other things moving simultaneously that might explain the movement of the asset you’re interested in.Sam’s recommendationsSam recommends listening to or reading people who are practitioners involved in markets day to day rather than journalists, who, though they do a great job, a lot of them write for a different reason than to make you a better investor.No.1 goal for the next 12 monthsSam’s number one goal for the next 12 months is to try and stay on the right side of the macro picture.Parting words “Have a plan.”Sam Burns [spp-transcript] Connect with Sam BurnsLinkedInTwitterYouTubeWebsiteAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Jay Pelosky has over 35 years of both buy and sell side financial market experience. While at Morgan Stanley, he was ranked # 1 in Institutional Investor in Global Equity Strategy and Global Asset Allocation Strategy.STORY: In the 90s, Jay was bullish about Mexico even though people were concerned about foreign currency debt and the country’s risk of devaluation. He remained adamant that people shouldn’t worry because Mexico wouldn’t devalue, and everything would be fine. Lo and behold, the Mexican government devalued in the middle of the night.LEARNING: You can be right but at the wrong time. A forward-thinking approach is precious as an investor. You must have a thick skin to be an investor because you’ll get stuff wrong often. “The only person who hasn’t struck out is the person who hasn’t swung the bat. In other words, if you’re going to be in this business, you’re going to make mistakes.”Jay Pelosky Guest profileJay Pelosky has over 35 years of both buy and sell side financial market experience. While at Morgan Stanley, he was ranked # 1 in Institutional Investor in Global Equity Strategy and Global Asset Allocation Strategy. He has over 20 years of global macro experience and has spent much of the past 20 years investing his own capital using US-listed ETFs.TPW Advisory is a NYC-based, independent investment boutique offering global asset allocation and portfolio strategy advice to retail and institutional investors through its Model Portfolio Delivery Service (MPDS). Learn more at pelosky.com.Worst investment everIn the 1990s, Jay was the Latin American strategist at Morgan Stanley Asset Management and the research department head. He had hired many people and did a lot of IPO business because of the emerging market enthusiasm. Many S&P investors were peeling off 5% or 10% of their exposure and putting it in emerging markets to juice their returns relative to the S&P.Jay was bullish about Mexico even though people were concerned about foreign currency debt and the country’s devaluation risk. He remained adamant that people shouldn’t worry because Mexico wouldn’t devalue, and everything would be fine. He encouraged people to stay invested.Lo and behold, the Mexican government devalued in the middle of the night. Jay had to go in front of the sales force, admit that he had gotten it wrong, and articulate how he got it wrong. He became the poster child in the Wall Street Journal for how Wall Street got Mexico wrong.Lessons learnedYou must have a thick skin to be an investor because you’ll get stuff wrong often.Learn to handle being wrong publicly, shake it off, and understand where you went wrong.A forward-thinking approach is precious as an investor.Andrew’s takeawaysYou can be right but at the wrong time.If you’re taking risks, you’re definitely going to lose. Even the best people fail; it’s just part of the game.Actionable adviceTalk with someone with more experience to give you an honest read on what their bullish view is. Ask them to help you identify some of the risks.Jay’s recommendationsIf you want to get into the business of Wall Street or invest in the capital markets, Jay recommends establishing your own portfolio. By showing that you’re willing to bet on yourself, you’ll go a long way toward encouraging others to bet on you.No.1 goal for the next 12 monthsJay’s number one goal for the next 12 months is to have a good portfolio performance and continue to identify opportunities, avoid market pitfalls, and provide excellent service to his clients.Parting words “It’s been a great discussion. I appreciate your questions and the opportunity to tell some of my stories. It’s always fun.”Jay Pelosky [spp-transcript] Connect with Jay PeloskyLinkedInTwitterWebsiteAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Jerry Parker started his trading career in 1983 in the Richard Dennis Turtle Program. He started Chesapeake Capital in 1988. Chesapeake manages about $200M in private funds, mutual funds, ETFs, and managed accounts.STORY: Jerry has had some stinker investments in real estate and gold over the years. Two things that have cost him money in his real estate investment are overpaying and not being patient. Often, Jerry would find himself buying homes by speculating and thinking that he knew what he was doing, only to realize that he didn’t.LEARNING: Understand what you’re capable of and your limitations as well. Be afraid of situations you’re unfamiliar with and assume the worst. “If you’re at a poker table and don’t know who the patsy is, it’s usually you.”Jerry Parker Guest profileJerry Parker started his trading career in 1983 in the Richard Dennis Turtle Program. He started Chesapeake Capital in 1988. Chesapeake manages about $200M in private funds, mutual funds, ETFs, and managed accounts. All of the trading is done using a Trend Following + Nothing approach. The funds are maximally diversified and include bond, commodity and currency futures, stocks, crypto, and FX forwards. Jerry is active on Twitter and Twitter Spaces at @rjparkerjr09.Worst investment everOver the years, Jerry has had some stinker investments in real estate and gold. Two things that have cost him money in his real estate investment are overpaying and not being patient. Often, Jerry would find himself buying homes by speculating and thinking that he knew what he was doing, only to realize that he didn’t.Lessons learnedUnderstand what you’re capable of and your limitations as well.Be afraid of situations you’re unfamiliar with and assume the worst.Andrew’s takeawaysDo what feels right for you, but don’t feel pushed into something just because everybody else does it.Actionable adviceFind a great mentor in a field you’re passionate about, and learn from them. Also, be ready for a big break.Jerry’s recommendationsJerry recommends finding people on Twitter and subjects you’re interested in and following them for great advice. He also recommends listening to podcasts and reading books to get information about things you can’t learn in college.No.1 goal for the next 12 monthsJerry’s number one goal for the next 12 months is to stay disciplined, keep doing what he’s been doing, and continue improving his portfolio.Parting words “Thank you for having me. I will go back and listen to some of your old podcasts.”Jerry Parker [spp-transcript] Connect with Jerry ParkerLinkedInTwitterWebsitePodcastAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

Fed Success! High LT Rates & Recession ComingWorld yield curve inversion is falling because of rising LT ratesRising LT rates are reducing yield curve inversion fastest in DM Americas and DM EuropeRates are high across EMs, crushing in FMs, and low in EM AsiaFrance and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT ratesRates are low in China, which, together with India, never invertedRates returning to normal?Irving Fisher (1867 –1947) – One of the earliest American neoclassical economistsDescribed as "the greatest economist the United States has ever produced"His reputation during his lifetime was irreparably harmed by his public statement, just nine days before the Wall Street Crash of 1929, that the stock market had reached "a permanently high plateau"His 1930 treatise, The Theory of Interest, summed up a lifetime's research into capital, capital budgeting, credit markets, and the factors (including inflation) that determine interest ratesSome core conceptsTime Preference – The idea that people generally prefer to have goods and services sooner rather than laterReal Interest Rate – The real interest rate adjusts for the effects of inflation, allowing for a more accurate evaluation of the purchasing power of money over timeFisher Equation – Relates nominal interest rates to real interest rates and inflationExpressed as: Nominal Interest Rate = Real Interest Rate + Inflation RateThe Fisher Effect - Suggests that nominal interest rates adjust in response to expected changes in inflationIn other words, if people anticipate higher inflation, nominal interest rates will rise to compensateJeremy Siegel (born 1945) Professor of finance at the Wharton School of the University of Penn.Comments extensively on the economy and financial marketsWrote two books, but most prominent isStocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-Term Investment StrategiesHistory of the real return on long-term US government bondsGlobal MarketsWorld yield curve inversion is falling because of rising LT ratesInterest rate level – 5.4% world 3m yield, 10yr 4.4%; LT rates much higher in EMWorld 3m rates were 5.4% in Sept., DM rates were 4.4%, and EM rates were 6.9%, a 2.6ppt premiumWorld 1yr rates were 5.1% in Sept., DM rates were 4.3%, and EM rates were 6.2%, a 1.9ppt premiumWorld 10yr rates were 4.7% in Sept., DM rates were 3.8%, and EM rates were 5.9%, a 2ppt premiumYear-on-year changes – DM 3m yield rose from lower base; fast DM LT rate rise3m yield had a large 2.2ppt YoY rise to 4.4% in DM; there was a smaller 1.4ppt rise in EM1yr rates only increased 0.7ppts YoY in EM; but were up a large 1.4ppt YoY in DM10yr EM rates up only 0.2ppts YoY, DM rates rose by a much higher 0.7pptsRate progression – DM tightening has stopped but continues in EM3m rates were flat MoM in DM and are on the rise in EMA 0.5ppt MoM rise in EM 1yr yield is raising World yields; DM yield was flatSept 10yr yield rose in both DM and EM, up about 0.4ppts MoMYield curve – Rising LT rates pushed world past August peak inversionAugust looks to have been World peak inversion as LT yields have been risingWorld 3m rates rose fast, but now LT rates have started to riseMay looks to have been DM peak inversion as LT yields start to rise3m DM rates have flattened, but LT rates have been rising, reducing yield curve inversionAugust looks to have been EM peak inversion as LT yields have been risingAfter a year of significant rises in EM ST rates, LT rates have started rising, reducing inversionKey points and the bottom line5.4% world 3m yield, 10yr 4.4%; LT rates much higher in EMDM 3m yield rose from lower base; fast DM LT rate riseDM tightening has stopped but continues in EMRising LT rates pushed world past August peak inversionWorld yield curve inversion is falling because of rising LT ratesDeveloped Market RegionsRising LT rates are reducing yield curve inversion fastest in DM Americas and DM EuropeInterest rate level – High DM Americas rates, EM Europe lower, and DM Pacific much lowerDM Americas 3m rates were 5.4% in Sept, DM Europe rates were 4.0%, DM Pacific rates were 1.4%DM Americas 1yr rates were 5.5% in Sept, DM Europe rates were 3.7%, DM Pacific rates were 1.6%DM Americas 10yr rates were 4.5% in Sept, DM Europe rates were 3.6%, DM Pacific rates were 2.1%Year-on-year changes – ST rates rising in DM Europe, LT rates rising in DM Americas2.8ppts YoY 3m rate rise in DM Europe, to 4%; up only 0.5ppt to a low 1.4% in DM PacificDM Americas and Europe had a high 1.5ppt rise in 1yr rate; 0.5ppt in DM Pacific to a low 1.6%DM Americas had the highest rise in 10yr yields, up 0.8ppts, but other regions are rising as wellRate progression – Rates hardly moved MoM across all DM regionsDM Europe central bank tightening drove fast 3m rate YoY rise; rates flat MoM in all DM regions1yr rate barely moved MoM in all DM regions10yr yield rising fastest MoM in DM Americas and Europe, slow MoM rise in DM PacificYield curve – Rising LT rates in DM Americas and Europe flattening yield curve; normal in DM PacificDM Americas inversion peaked in May 2023; LT rate rise reduced inversion by 0.5ppts MoMDM Europe yield curve inversion peaked a bit later, in August, and fell MoM due to LT rate riseDM Pacific yield curve never inverted as it never went through a US Fed-style hiking cycleKey points and the bottom lineHigh DM Americas rates, EM Europe lower, and DM Pacific much lowerST rates rising in DM Europe, LT rates rising in DM AmericasRates hardly moved MoM across all DM regionsRising LT rates in DM Americas and Europe flattening yield curve; normal in DM PacificRising LT rates are reducing yield curve inversion fastest in DM Americas and DM EuropeEmerging Market RegionsRates are high across EMs, crushing in FMs, and low in EM AsiaInterest rate level – ST EM rates high, ranging from 12% to 35%, but a low 3.2% in EM AsiaEM Americas 3m rates were 11.9% in Sept, EM Asia rates were 3.2%, EM Europe rates were 11.6%, EM ME&A rates were 15.7%, Frontier rates were 33.5%EM Americas 1yr rates were 11.3% in Sept, EM Asia rates were 3.1%, EM Europe rates were 15.2%, EM ME&A rates were 25.2%, Frontier rates were 16%EM Americas 10yr rates were 11% in Sept, EM Asia rates were 3.6%, EM Europe rates were 12.5%, EM ME&A rates were 17.5%, Frontier rates were 11%Year-on-year changes – ST rates in FM and EM ME&A are up, LT rates are rising fast in EM EuropeBiggest YoY rise of 3m yields in Frontier markets, up 10.6ppt, and EM ME&A up 4.6ppt1yr yield rose most YoY in EM ME&A, up 7.4ppt and EM Europe up 5.2ppt10yr yields flat YoY in EM Americas; 3.2ppt rise in EM Europe and 2.9ppt rise in EM ME&ARate progression – FM ST rates up massively, but flat MoM, LT rates rising in EM Europe3m rates up MoM in EM Europe; down in super high FMs and high EM Americas; flat in EM Asia1yr yields show significant rise in EM Europe; High in EM ME&A; Low in EM AsiaLT rates are up across EMs, rising particularly fast MoM in EM Europe, low and flat in EM AsiaYield curve – Inversion massive in FM, falling in EM Americas; normal in EM Asia, Europe, and EM ME&AEM Americas yield curve inverted slightly more than World; but peaked in June 2023EM ME&A yield curve never inverted as ST rates have always been highFrontier yield curve inversion peaked in August 2023, but crushing ST rates remainKey points and the bottom lineST EM rates high, ranging from 12% to 35%, but a low 3.2% in EM AsiaST rates in FM and EM ME&A are up, LT rates are rising fast in EM EuropeFM ST rates up massively, but flat MoM, LT rates rising in EM EuropeInversion massive in FM, falling in EM Americas; normal in EM Asia, Europe, and EM ME&ARates are high across EMs, crushing in FMs, and low in EM AsiaDeveloped CountriesFrance and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT ratesInterest rate level – US/UK have 5.5% ST and 4.6% LT rates, Germany and France lower at 3.6%US 3m rates were 5.5% in Sept, Japanese rates were 0.2%, German rates were 3.6%, UK rates were 5.4%, French rates were 3.8%US 1yr rates were 5.5% in Sept, Japanese rates were zero, German rates were 3.7%, UK rates were 5.1%, French rates were 3.8%US 10yr rates were 4.6% in Sept, Japanese rates were 0.8%, German rates were 2.8%, UK rates were 4.4%, French rates were 3.4%Year-on-year changes – ST rates are rising fast in France and Germany, LT rates rising most in the USFastest YoY 3m yield rise in France and Germany, up about 3ppt; no change in Japan1yr yield up about 2ppts in France and Germany; Japan flatBiggest 10yr yield rise in the US, followed by France and GermanyRate progression – MoM LT rates rising in the US, Germany, France, UK and Japan are flat MoM 3m rates rose most in France and Germany; US and UK have steadied; Japan remains flat1yr rates rose most in France and Germany; US is rising MoM; Japan remains flatLT rates are up half ppt in the US, Germany, and France; even Japan has been risingYield curve – Germany, UK, and France passed peak inversion in Aug; US passed in MayUS yield curve inversion peaked in May 2023; 10yr rates rose by 50bp MoM in Sep 2023Japan had a tiny MoM 0.1ppt increase in both short and long-term rates, never invertedThe deepest inversion in Germany was Aug 2023; rising LT rates have reduced inversionThe deepest inversion in the UK was Aug 2023; tiny LT rate rise, and tiny ST rate fall MoMThe deepest inversion in France was Aug 2023; LT rates up 4bp MoMKey points and the bottom lineUS/UK have 5.5% ST and 4.6% LT rates, Germany and France lower at 3.6%ST rates are rising fast YoY in France and Germany, LT rates rising most in the USLT rates rising MoM in the US, Germany, France; UK and Japan are flat MoMGermany, UK, and France just passed peak inversion in Aug; US passed in MayFrance and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT ratesEmerging CountriesRates are low in China, which, together with India, never invertedInterest rate level – Low 2-4% rates in China and Korea, 7% in India, and 12% in Russia and BrazilChinese 3m rates were 2.3% in Sept, Indian rates were 6.9%, Korean rates were 3.6%, Russian rates were 12.4%, Brazilian rates were 12.3%Chinese 1yr rates were 2.2% in Sept, Indian rates were 7%, Korean rates were 3.6%, Russian rates were 16.5%, Brazilian rates were 11%Chinese 10yr rates were 2.7% in Sept, Indian rates were 7.2%, Korean rates were 4%, Russian rates were 12.9%, Brazilian rates were 11.7%Year-on-year changes – ST rates in China, India, and Korea up less than 1ppt, LT rates flat; rates rising in Russia3m yield up most YoY in India and Korea, followed by China; down in Brazil1yr yield was up most YoY in Russia, down in Brazil10yr yield was down a bit YoY in China, India, Korea, and Brazil; up only in RussiaRate progression – Yields are flat in China, India, and Korea, rising in Russia and falling in Brazil3m yield flat MoM in India, Korea, and Russia; rising a bit MoM in China, falling in Brazil1yr yield rising fast in Russia; down MoM in India and Brazil10yr yield was up YoY only in Russia but up MoM slightly in China, India, Korea, & BrazilYield curve – Yield curves never inverted in China and India; Russia's inversion stopped; Brazil passed inversion peakChina never inverted; ST rates were up 30bps MoM, LT rates were up only 10bpsIndia never inverted; nearly flat yield curve has remained unchanged MoMKorea saw a brief and mild inversion in Jan 2023; slight MoM steepening w/ LT rates upPeak Russian inversion Oct 2022; LT rates up nearly 1ppt MoMPeak Brazil yield curve inversion in Jun 2023; nearly equal MoM fall in ST rates and rise in LTKey points and the bottom lineLow 2-4% rates in China and Korea, 7% in India, and 12% in Russia and BrazilST rates in China, India, and Korea are up less than 1ppt, LT rates flat; rates rising in RussiaYields are flat in China, India, and Korea, rising in Russia and falling in BrazilYield curves never inverted in China and India; Russia's inversion stopped; Brazil passed peakRates are low in China, which, together with India, never inverted Click here to get the PDF with all charts and graphs 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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

BIO: William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.STORY: In 1990, William asked a trader to buy him 10 shares in Berkshire Hathaway, thinking a share was selling at $1,200, only to be told it was $12,000. He decided to keep two shares and sold the other eight. Had William invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.LEARNING: Get the numbers right before you invest. “I decided to write this book for people who wanted to know about how Wall Street works but were afraid to ask how things work.”William Cohan Guest profileWilliam D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.Worst investment everIn 1990, William was interested in buying some Berkshire Hathaway stock. The company he was working for at the time, Lazard, had a Quotron machine on each floor. William used the machine to get Berkshire’s stock price of the day and got $1,200 a share. William went down to the company’s trader and told him that he wanted to buy 10 shares of Berkshire Hathaway. William figured 1,200 x 10, that’s $12,000, and as a first-year associate, he didn’t have much money but figured he had 12,000 extra dollars to invest in Warren Buffett’s Berkshire Hathaway shares.Twenty minutes later, the trader called William back, and he said the trade was done and to pay $120,000. William was in shock because he thought he was supposed to pay $12,000 and not $120,000. The trader explained that the Quotron machine only goes to four decimal points, so he’d gotten $1,200.William didn’t have $120,000, so he decided to keep only two shares at $24,000. The trader sold the other eight back into the market. Now, 33 years later, the Berkshire Hathaway stock is trading for something like $540,000 a share. William’s two shares are now worth over a million dollars, and he only paid $24,000 for them, which is nice. But he also let go of eight shares. Had he invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.Lessons learnedGet the numbers right before you invest.William’s recommendationsWilliam recommends his books because he believes they’re great resources for learning about important events and companies on Wall Street.No.1 goal for the next 12 monthsWilliam’s number one goal for the next 12 months is to continue writing his new book and the weekly writing assignments for POC.Parting words “Enjoy your life as much as you can. No one gets out alive.”William Cohan Connect with William CohanLinkedInTwitterWebsiteBooksAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in Canadian and UK capital markets.STORY: Neil invested in an internet company building website templates when the internet was just starting. The company filed to go public, but the financiers kept delaying the process and never went public. Six months later, the company went to zero. Neil lost his entire investment.LEARNING: Take the profit when you can. Take some money out and play with the rest. Do your due diligence. “Try not to be overly greedy. There’s something about leaving a little on the table for someone else.”Neil Johnson Guest profileNeil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in both Canadian and UK capital markets.He currently serves as the Executive Director and Chief Executive Officer of Duke Royalty. He is responsible for leading deal origination, due diligence, and structuring for Duke, a $300 million alternative finance investment company listed on the London Stock Exchange.Neil’s expertise as CEO of Duke Royalty and in his prior role as European Head of Investment Banking at Canaccord Genuity is invaluable for business owners of private companies and investors in public companies.He has played an instrumental role in the growth and success of companies, raising over $5 billion in funding for hundreds of companies during his 19-year tenure.Worst investment everDuring the run-up to the.com one era, when the internet was starting, Neil was a young internet analyst with some exposure to some of the high-flying stocks of the day. He learned of a company that was creating website templates. The company was looking for investors, and Neil thought it was a good investment, so he invested his savings. Neil also charged the company an investment banking fee that he was taking in stock.Though the business had a good product, it was too early into the market, so no one paid attention. Neil was getting in at 50 cents a share. A few years later, the internet bubble enveloped the company. The founders got a call from one of the biggest internet financiers in Silicon Valley and got signed up to go public.They did a pre-public round, so they wanted to buy all the shares they could get. They tried to get Neil to sell his shares to them at $5 a share, which was ten times more than he paid for his shares. He, however, wasn’t interested in selling his shares as he believed the company would grow and the shares would be worth a lot more.The company filed to go public in March 2000, and now the shares were selling at $15. They kept delaying the process and never went public. They had ballooned the management team and company costs. The company had about $25 million on the balance sheet, but management blew through all of it. Six months later, the company went to zero. Neil lost his entire investment.Lessons learnedTake the profit when you can.Take some money out and play with the rest.Do your due diligence.Andrew’s takeawaysYou’ve got to have a lot of bets lined up so that one decision doesn’t wipe you out.Actionable adviceDon’t be overly greedy. There’s something about leaving a little on the table for someone else.Neil’s recommendationsNeil recommends investing in Duke Royalty because cash flow is king.No.1 goal for the next 12 monthsNeil’s number one goal for the next 12 months is to continue investing in good companies, get that cash flow out to his investors in dividends, and look for new opportunities.Parting words “Stay safe out there. Investing is never 100%; you just have to win more than you lose.”Neil Johnson [spp-transcript] Connect with Neil JohnsonLinkedInWebsiteAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Jeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally.STORY: In 2012, Jeremy bought Tesla for about $2 a share and sold it eight months later for 50% more. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was of mediocre quality initially.LEARNING: Use differentiated insight to evaluate an investment. When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is. “My mistake was not having any insight into the business other than why I think the OEM contracts made this business look relatively cheap.”Jeremy Deal Guest profileJeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally. The fund makes multi-year investments in companies with substantial unrecognized earnings potential. Fund investment criteria are rooted in four basic tenets around business quality.Worst investment everIn 2012, Jeremy bought Tesla for roughly what would be about $2 a share today and sold it eight months later for 50% more. Looking back, Jeremy sold what would today be worth around $100 million for less than a million dollars.Jeremy didn’t understand how bad the competition was for Tesla at the time. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was mediocre to low quality initially and was falling apart.Lessons learnedUse differentiated insight to evaluate an investment.When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is.Parting words “When you think about a business over multiple years, consider the intangibles. Think about the competitive advantage of the business and its ability to evolve. Think about the disruption risk in the business you’re competing with.”Jeremy Deal [spp-transcript] Connect with Jeremy DealLinkedInWebsiteBook recommendationAndrew’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:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast