My Worst Investment Ever Podcast

BIO: Steve Faktor is a former Fortune-100 executive—turned entrepreneur, futurist author of Econovation, and podcaster. As Managing Director of IdeaFaktory Innovation, he helps tech, financial services, and consumer goods clients see and build the future.STORY: Steve joins the My Worst Investment Ever podcast again, this time sharing advice on how investors can see and build their investment futures.LEARNING: Try to understand the future by differentiating between noise and legitimate signals. Don’t let others impose on your story. Act in principle. “I would like to see more people acting in a principled way because even if you win, but you do it without principle, you will have lost because those same unprincipled methods will come back to haunt you.”Steve Faktor Guest profileSteve Faktor is a former Fortune-100 executive—turned entrepreneur, futurist author of Econovation, and podcaster. As Managing Director of IdeaFaktory Innovation, he helps tech, financial services, and consumer goods clients see and build the future.Steve is a LinkedIn Influencer with over 750,000 followers and has been featured in Forbes, Harvard Business Review, and The Wall Street Journal, among others. He’s a popular keynote speaker at major events and numerous corporations.The McFuture Podcast features Steve’s provocative predictions and prescriptions, as well as guests like Larry King, comedian Jim Jefferies, Governor Jesse Ventura, Nobel Economist Joseph Stiglitz, former ACLU President Nadine Strossen, Megachurch Pastor AR Bernard, and many more.Previously, Steve launched multiple $150m+ loyalty, payments, and e-commerce products & services as head of the American Express Chairman’s Innovation Fund, SVP at Citi Ventures, VP of Strategy & Innovation at MasterCard, and management consultant at Andersen.Steve joins the My Worst Investment Ever podcast again, sharing advice on how investors can see and build their investment futures. Listen to his previous episode: Take the Risk and Pursue Your Dreams.Understanding the future as a long-term investorIf you want to invest in three to ten-year opportunities, Steve says you need to know what the future will look like or at least have an idea of what that might be. However, as we try to understand the future, Steve says most of what we are reacting to is noise. You therefore, need to learn how to filter out what is signal and what is noise. Once you’ve identified which opportunities are legitimate signals and not noise, ask yourself where they could go. You’ll never know for sure. But again, that’s where you assign probabilities and say, this is likely to happen or more likely than something else. Now that you have an idea of where these things might go and what this future might look like, ask yourself how you’ll act in that future.Steve adds that there’s another equal danger to listening to noise, which is deafness. So there’s the hearing of everything that may not be relevant or important, and then there’s complete deafness. Steve says the vast majority of people are deaf. And so they’re not even hearing and understanding the signals or the noises. Such people are complete pawns in whatever the people who are active and responding to either signal or noise will determine.This kind of deafness is because some people there are institutionalized and believe that whatever system has worked for them is what is working. They don’t have an incentive to look any deeper. So they just putter along.Dealing with propagandaWhile propaganda is a negative characterization, and for good reason, Steve thinks personal narratives are important. The story that you tell yourself of how the world works and what matters to you is the story that will motivate you to do something. Now the question is, is it a good something or a bad something? Will it propel you forward to be a better person to help others to do things that are moral and unjust? Or will it push you to do harmful and destructive things, profiteering, or whatever else that may not be moral?So the question is, what is the story? What are the stories that we want to have versus the stories others want us to have? So, regarding propaganda, Steve believes that what matters is the imposition of other people’s stories into our lives and our response to them. Will you make their imposition part of your story, or do you have the ability to decide what your story should be? Steve says that’s tricky because we’re not equipped to deal with this level of propaganda individually.The victim-oppressor ideologySteve also talks about a terrifying ideological thing currently happening, especially in the education system. There are groups in education institutions about the victim-oppressor ideology. According to Steve, this ideology works by weaponizing empathy. It’s a brutal ideology, but its brutality is cloaked in justice and kindness. So, it’s the appearance of compassion and empathy. So people care about the victim but are prepared to stand behind or have the state impose the most incredible force to achieve the equity and kindness they think is just.Steve believes the only way to stop this ideology is to emphasize morality. We need a re-moralization because the former systems of morality have failed as they’ve outlived their useful life. Steve insists that empathy can be weaponized when it’s not paired with morality. But people are far more concerned with the appearance of goodness than the actuality and reality of virtue. And that is where the problem is. Combining the lack of morality, weaponized empathy, appearances, and the motivations on social media to present yourself a certain way becomes a deadly combination. And so what we desperately need is re-moralization.The thing that concerns Steve the most, he adds, is principles. Principles, just like morality, are unfortunately a luxury good. When you don’t have things, you aren’t too worried about being that moral. You’ll steal to get food for your child, for example. However, most people in the US have enough—not what they feel they should have—but are at a point where they can afford morality and principle. But they’re not buying either. Steve would like to see more people acting in a principled way because even if you win but it was without principle, you will have lost. Those same unprincipled methods will come back to haunt you.Parting words “What do you believe in? What do you think a moral person is? What do you think a principled person is? What do you think is right and wrong, and does it apply equally to the people you hate as to those that you love? That’s what I want people to think about because I think that’s the crisis of our time.”Steve Faktor Connect with Steve FaktorLinkedInTwitterYouTubeWebsitePodcastAndrew’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 mentionedJohn Perkins, Confessions of an Economic Hit Man.

BIO: Eric Simonson is the Founder and CEO of Abundo, a financial planning firm that teaches and empowers people to take action and own their financial lives.STORY: In 2020, during the early days of COVID-19, Eric and his wife sold their home and bought a condo because they wanted to live downtown. They later sold the condo in 2023 and lost about 10% on that home purchase.LEARNING: Not all real estate investments are made equal. Focus on location and build quality. Don’t expect to flip new builds into a profit immediately. Don’t bet on a recovery of a big macro event. “Make sure you’re confident you’re gonna live in your new home long enough to recoup some of those initial buying costs.”Eric Simonson Guest profileEric Simonson is the Founder and CEO of Abundo, a financial planning firm that teaches and empowers people to take action and own their financial lives. After working as a traditional advisor for over a decade, Eric saw a need to help people who couldn’t work with a traditional financial advisor since most require having a certain amount of money to invest with them first. He left his corporate job and launched a different model, one where he was only paid for giving honest advice that benefited his clients, not him. He built Abundo around a Flat Fee and Advice-Only Financial Planning model, eliminating all conflicts of interest without overcharging for professional advice and using proven low-cost investments. His firm now guides over 450 clients in all areas of their financial lives.Worst investment everIn 2020, during the early days of COVID-19, Eric and his wife sold their home and bought a condo because they wanted to live downtown. They sold the condo in 2023 and lost about 10% on that home purchase.Lessons learnedThe condo market behaves differently than the single-family home market.Downtown markets behave differently than suburban markets.Not all real estate investments are made equal. Focus on location and build quality.Don’t expect to flip new builds into a profit immediately.Don’t bet on a recovery of a big macro event. It’s hard to guess what’s going to happen.Andrew’s takeawaysIt’s challenging to sell secondhand condos.Actionable adviceEnsure you’re confident you’ll live in your new home long enough to recoup some of those initial buying costs. Don’t spend more on a condo purchase than you’re comfortable spending. Understand the rules around the rentability—what happens if you want to get out of it? Can you rent it out?Eric’s recommendationsEric recommends checking out his company’s blog for fresh content and valuable resources.No.1 goal for the next 12 monthsEric’s number one goal for the next 12 months is to create the best culture and team he can make. If he does that, the team will work hard and serve clients well.Parting words “Thank you for having me, Andrew. I appreciate it.”Eric Simonson [spp-transcript] Connect with Eric SimonsonLinkedinTwitterInstagramWebsiteAndrew’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: Kimberly Flynn, CFA, is a founder and Managing Director of XA Investments, responsible for all product and business development activities.STORY: Kimberly put all her $2,000 savings into a single telecom-dedicated mutual fund at the peak of telecom valuations and saw it go down to 30 cents on the dollar.LEARNING: Don’t put all your savings into a single idea. Be diversified, especially when dealing with active manager selection. Know yourself and your risk tolerance. “You’ve got to feel comfortable making investment decisions, and if you’re not, get advice from somebody who can give you the right guidance.”Kimberly Flynn Guest profileKimberly Flynn, CFA, is a founder and Managing Director of XA Investments, where she is responsible for all product and business development activities. XA Investments has a proprietary closed-end platform and a consulting practice to assist clients with developing US and UK-registered closed-end funds. Previously, Kim was Senior Vice President and Head of Product Development for Nuveen Investments’ Global Structured Products Group.Kim received her MBA degree from Harvard University and her BBA in Finance and Business Economics, summa cum laude, from the University of Notre Dame in 1999. Kim earned the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute and CFA Society of Chicago.Kim was recently selected to serve on the Notre Dame Wall Street leadership committee. She also serves as secretary of the Chicago Symphony Orchestra Women’s board executive committee and on the advisory board of Youth Guidance’s Becoming A Man program. She is an active member of the Harvard Club of New York City and the University Club of Chicago, where she serves on the Finance Committee.Worst investment everKimberly made a $2,000 investment into an Invesco telecom-dedicated mutual fund at the peak of telecom valuations. This was in 1999, and very quickly rode it down to 30 cents on the dollar. Kimberly was assured that the telecom sector would be hot based on the research she was doing at the time at Morgan Stanley. This was Kimberly’s first investment after graduating college.Lessons learnedBe diversified, especially when dealing with active manager selection.Know yourself and your risk tolerance.You’ve got to feel comfortable making investment decisions, and if you’re not, get advice from somebody who can give you the proper guidance.Andrew’s takeawaysSet a long-term plan and methodically contribute to it.Find your investment style and follow it.Actionable adviceTake 80% of the amount you plan to invest and put it into a diversified portfolio. Then, take 20% of it and buy a telecom or crypto fund because experimentation is sometimes helpful. If you lose 20% of your investment, you can recover.Kimberly’s recommendationsIf you’re working in the financial space, Kimberly recommends checking out resources on her website, XA Investments, to learn more about alternatives. She also recommends reading The Economist or The Financial Times to gain a global perspective.No.1 goal for the next 12 monthsKimberly’s number one goal for the next 12 months is to launch new products and take on new prospective consulting clients so she can grow her business.Parting words “Stay positive. Even if you make a mistake, you can always start again and take on a new challenge or a new investment opportunity.”Kimberly Flynn [spp-transcript] Connect with Kimberly FlynnLinkedinTwitterWebsiteAndrew’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: Peter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience.STORY: He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand just when it was being legalized for recreational purposes. At the time, there were no clear regulations, making compliance with the ever-changing rules costly to the point where the business was not making any profits.LEARNING: Check your emotions at the door. Be cautious before you jump on a trend. Analyze and understand your risk. Get expert help if you don’t understand your investment. “Check your emotions at the door. Ego and greed don’t have interplay when making a sound investment.”Peter Goldstein Guest profilePeter Goldstein is a seasoned entrepreneur, capital markets expert, and investor with over 35 years of diverse international business experience. Throughout his career, he’s held pivotal roles, including CEO, chairman, investment banker, founder, board member, investor, and advisor to public, private, and emerging growth companies.He founded Exchange Listing, LLC, dedicated to facilitating growth companies’ listings on esteemed exchanges like NASDAQ and the NYSE.He also founded Emmis Capital, a specialized boutique fund investing in global small and microcap pre-IPO growth companies.Worst investment everPeter was living in California when cannabis was being legalized for recreational purposes. He and four others put a significant amount of money into opening up this facility in Long Beach, California, where cannabis was in great demand. They went through all of the necessities to get the license to comply and build the facility, not realizing the complexities and challenges that would result in the worst investment Peter has ever made.A few factors made Peter want to invest in a licensed facility that was going to manufacture and distribute recreational and medical cannabis products in the largest state in the US with the most history in the cannabis sector. One, there was a crowd and a popular trend for cannabis. Two, an emotional component of greed made him believe he could make an exponential return on his investment. Unfortunately, Peter didn’t think about the risk component, nor did he think about getting expert advice to guide him through understanding the industry and how to manage risk.Another thing that affected their business was that they were one of the first movers. And so, as they were learning, so were the regulators, and every time they learned something new or something changed, the business owners had to react to that. Also, there was not yet a proven market. There was a grey market, and there was certainly a black market. But there wasn’t a compliant market where it was understood what the accurate margins would be. Of course, there was significant demand. But after deducting all of the production costs, regulatory taxes, and distribution, the margins were slim to none.Lessons learnedCheck your emotions at the door. Ego and greed don’t have an interplay when making a sound investment.Be cautious before you jump on a trend. Don’t follow the crowd mindlessly just because everyone’s going in that direction.Analyze and understand your risk.Get expert help if you don’t understand your investment.Don’t believe your own thoughts about how unique your product or service is. Pressure tests ensure that what you think is received by the market is true.Andrew’s takeawaysIf you’re starting a business, know that you and your business will be a commodity. The only way to get out of that is by thinking about strategy, positioning, how you will enter this industry, what will be different about you, and having the discipline to follow that strategy.Actionable adviceDon’t believe the hype.Peter’s recommendationPeter recommends his new book, The Entrepreneur’s IPO: The Insider’s Roadmap to Taking Your Company Public, for any entrepreneur wanting to understand the IPO process. There are 12 chapters in the book. Each chapter features two industry professionals from NASDAQ, the New York Stock Exchange, the London Stock Exchange, etc., giving practical advice to fill a knowledge gap for entrepreneurs considering taking their companies public.No.1 goal for the next 12 monthsPeter’s number one goal for the next 12 months is to build a global community of entrepreneurs who want to learn and understand investing in micro and small-cap companies.Parting words “It’s been a pleasure. Good luck, everyone. Stay smart and stay safe.”Peter Goldstein [spp-transcript] Connect with Peter GoldsteinLinkedInTwitterAndrew’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

In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?LEARNING: Always run a regression analysis against an asset pricing model on portfoliovisualizer.com. Actively managed funds have higher tax expenses than ETFs and mutual funds. “If you want to see if an active manager is truly outperforming and their appropriate risk-adjusted benchmark, run a regression analysis against an asset pricing model on portfoliovisualizer.com.”Larry Swedroe In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourteenth series, they discuss mistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks? And mistake 27: Do You Focus On Pretax Returns?Did you miss out on previous mistakes? Check them out:ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing WiselyISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake ExpertsISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s MoneyISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not KnowledgeISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You InvestISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return InvestmentsISMS 36: Larry Swedroe – Two Heads Are Not Better Than One When InvestingMistake number 26: Do You Fail to Compare Your Funds to Proper Benchmarks?In Larry’s opinion, mutual funds lie about their performance or bend the facts to suit their needs. The SEC requires mutual funds to define their category, but it doesn’t tell them what is the proper benchmark. So, the mutual fund can choose a benchmark that is easier to beat than a more appropriate benchmark to make it look good. A classic example is that all small-cap funds almost always benchmark themselves against the Russell 2000, a small-cap index. However, the Russell 2000 is not a small-cap stock index. The Russell 1000 is the largest 1000 of the largest 3000. The Russell 2000 is the next smallest 2000 stock of the largest 3000.Small-cap funds should be compared to a small-cap index, and large-cap funds should be compared to a large-cap index. The same is true about value and growth funds. Mark Carhart’s classic study of the mutual fund industry determined that once you accounted for style factors (small cap versus large cap and value versus growth), the average actively managed fund underperformed its benchmark on a pretax basis by 1.8% per year. For the 5-, 10-, and 15-year periods ending in 2000, only 16%, 16%, and 17% of actively managed funds outperformed the Wilshire 5000.To avoid making this type of mistake, Larry says you should compare the performance of an actively managed fund against its appropriate passive benchmark. If you want to see if an active manager is outperforming and their risk-adjusted benchmark is suitable, run a regression analysis against an asset pricing model on portfoliovisualizer.com.Mistake number 27: Do You Focus On Pretax Returns?According to Larry, active managers, on average, are smart and generate gross alpha. The problem is that their costs far exceed their ability to generate alpha. One of the oldest studies found the average stock-picking fund added value with their picks by about 0.8%. But their expense ratio was about 0.8%. The trading costs were 0.7%. Also, the cost of holding cash adds up, so they underperform by over 1% yearly. So investors, even though they may have identified a manager with stock picking skills, will underperform appropriate benchmarks anyway. But the sad part is that taxes for the average taxable investor are often the most significant expense they face.Robert Jeffrey and Robert Arnott showed the impact of taxes on returns in their study of 71 actively managed funds for the 10 years 1982-91. They found that while 15 of the 71 funds beat a passively managed fund on a pretax basis, only five did so on an after-tax basis.Larry says that individual investors are beginning to awaken to the critical role that fund distributions play in after-tax performance. This has been one of the driving forces behind the rapid growth of ETFs index and other passively managed funds.About Larry SwedroeLarry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management. [spp-transcript] Connect with Larry SwedroeLinkedInTwitterWebsiteBooksAndrew’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.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever PodcastFurther reading mentionedLarry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid ThemPhilip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral EconomicsLarry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals

BIO: Dr. Jitipol Puksamatanan heads macro and wealth research at CGS-CIMB Securities (Thailand). He develops actionable investment ideas, independent economic analysis, and asset allocation strategies.STORY: Jitipol learned as much as he could about a stock he was interested in. He was very confident in this stock. So much so that even when the stock price fell, and he made a loss, he doubled his investment, believing the price would go up, but it never did. Jitipol lost all his savings in this investment.LEARNING: Investing is about knowing yourself and what you’re doing. Investing is not gambling; don’t expect overnight success. “Investing is not a timed sport with a predetermined end time. If you’re seeking financial freedom, invest in the long-term and let time be your friend.”Jitipol Puksamatanan Guest profileDr. Jitipol Puksamatanan heads macro and wealth research at CGS-CIMB Securities (Thailand). He develops actionable investment ideas, independent economic analysis, and asset allocation strategies.Over the course of two decades, Dr. Jitipol has worked with securities, banks, and asset management companies.Worst investment everJitipol learned as much as he could about a stock he was interested in. He knew the company’s CEO and the management team; he knew what they were doing and how they did business. Jitipol was very confident in this stock. So much so that even when the stock price fell, and he made a loss, he doubled his investment, believing the price would go up, but it never did. Jitipol lost all his savings in this investment.Lessons learnedInvesting is about knowing yourself and what you’re doing.Investing is not gambling; don’t expect overnight success.Andrew’s takeawaysTrying to win back your losses is a dangerous game. It’s better to take a break, leave it, and let your mind and emotions get back on track.Before investing after a loss, ask yourself the best investment for this money.Actionable adviceInvesting is not a timed sport with a predetermined end time. If you’re seeking financial freedom, invest in the long term and let time be your friend.Jitipol’s recommendationsJitipol recommends listening to investment podcasts for new ideas and to gain knowledge.No.1 goal for the next 12 monthsJitipol’s number one goal for the next 12 months is to expand his community and build deeper relationships.Parting words “Good luck, happy investing, and remember to make friends.”Jitipol Puksmatanan [spp-transcript] Connect with Jitipol PuksamatananLinkedInTwitterFacebookWebsiteAndrew’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: Anatoliy Labinskiy is an entrepreneur, eCommerce expert, and a holder of 4-time Two Comma Club awards. He is the founder of GSM Growth, an agency that helps e-commerce entrepreneurs achieve a new level of growth in their businesses.STORY: When Anatoliy and his partner decided to scale their e-commerce shoe business, they paid a supplier in China $250,000 upfront and let him handle everything. The supplier sent customers low-quality shoes and eventually stopped shipping products despite having large orders. The partners had to refund customers and lost all the money they’d paid the supplier.LEARNING: Double-check with your supplier how the product looks and works before scaling your sales. Think about how you’ll control your inventory once you scale your sales. Start slow. “When you start scaling your business, even when you start just seeing a couple of sales here and there, ask your supplier to send you pictures and videos of the product in the warehouse.”Anatoliy Labinskiy Guest profileAnatoliy Labinskiy is an entrepreneur, eCommerce expert, and a holder of 4-time Two Comma Club awards. He is the founder of GSM Growth, an agency that helps e-commerce entrepreneurs achieve a new level of growth in their businesses. He is also a co-founder of EcomScout.io, an AI-powered service that tracks all loss events in advertising campaigns, providing real-time data and insights for informed decision-making and optimized ad spending.In addition to his entrepreneurial pursuits, Anatoliy hosts the highly acclaimed Ecom Business Stream Podcast. The podcast showcases real-life stories from successful entrepreneurs, executives, investors, and thought leaders, offering a glimpse into their journeys to success in the business world.Recognized for his outstanding achievements, Anatoliy Labinskiy is a member of the Forbes Business Council. He also proudly holds a place among the Top 100 USA Entrepreneurs with Ukrainian Origins, underscoring his influence and impact in the dynamic realm of e-commerce.As an international speaker, Anatoliy shares his knowledge and expertise with audiences worldwide, further establishing himself as a leading figure in the e-commerce landscape.Worst investment everIn 2019, Anatoliy and his partner decided to scale their e-commerce business. At the time, they were selling leather shoes. They pumped in $250,000 to pay the supplier for inventory and to ship to customers instantly. They had worked with this supplier for a couple of months, so they let him handle everything. The partners had never seen the shoes they were selling in real life. They had only seen the pictures provided by the supplier.Then, customers started sending emails complaining about the quality of the shoes. They thought it was just the usual case of a few unhappy customers and didn’t take it seriously until one customer insisted on sending back the shoes she had received so that the partners could see what they were selling. The shoes were sent to Anatoliy’s partner, who was in Minnesota. When the shoes arrived and the partner opened the box, it was unbelievable. The shoes had the smell of some toxic material. The shoes were plastic and wrapped in a garbage bag. The partners couldn’t believe what they were seeing. They couldn’t believe they had paid $250,000 for such crap.They contacted the supplier, who assured them he would ship the correct product. Two weeks after this conversation, the partners started receiving customer emails complaining that they hadn’t received their orders. On checking the tracking numbers, they realized that they were fake.So many people asked for chargebacks, causing PayPal and Stripe to hold all payments the customers had made. Anatoliy and his partner had to dip into their pockets to refund the customers. They never got the money that was put on hold.Lessons learnedDouble-check how the product looks and works with your supplier before scaling your sales.Think about how you’ll control your inventory once you scale your sales.You need cash flow and remain liquid for your business to stay afloat.Andrew’s takeawaysStart slow.Anatoliy’s recommendationAnatoliy recommends checking out his website for tips and tricks on running your e-commerce store and resources for writing ad copy that converts.No.1 goal for the next 12 monthsAnatoliy’s number one goal for the next 12 months is to get better quality customers for his agency and make it bigger in terms of results.Parting words “Look at your failures as lessons, and they won’t be failures anymore.”Anatoliy Labinskiy [spp-transcript] Connect with Anatoliy LabinskiyLinkedInTwitterInstagramFacebookYouTubePodcastWebsiteAndrew’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: Therapong Vachirapong is a Managing Director and a Head of Equity Research at Phatra Securities PLC.STORY: Therapong was a risk-averse investor who hardly took any risks. Therefore, he missed out on many investment returns and didn't increase his returns. The only time he’d take a risk was buying stocks when the prices were very low and in most cases, these stocks never grew in value.LEARNING: Avoid the maximum drawdown. You cannot increase your return without taking calculated risks. Have an investment style to avoid investing in everything. “Investing is actually not difficult as long as you don’t get emotional and make irrational decisions when prices change.”Therapong Vachirapong Guest profileTherapong Vachirapong is a Managing Director and a Head of Equity Research at Phatra Securities PLC. He served as the Co-Head of Equity Research and Banking Analyst until May 2018, covering fundamental equity analysis of Thailand finance and securities companies. He also covered strategy and the financial institutions sector for Thailand and worked closely with BofA Merrill Lynch Research Division regional financials team. He was also a part of the ASEAN investment strategy team. He joined Phatra in 1997.He won the IAA Awards for Analyst in the Financials sector in the Year 2013 and Best Research House for two consecutive years (2013-2014) by the Investment Analysts Association (IAA)Theraphong holds an MBA in Finance from Western International University, Arizona, USA, and a BA in Accounting and Finance from Thammasart University.Worst investment everTherapong was a risk-averse investor who hardly took any risks. Therefore, he missed out on many investment returns and didn't increase his returns. The only time he’d take a risk was buying stocks when the prices were very low, and in most cases, these stocks never grew in value.Lessons learnedYou cannot increase your return without taking calculated risks.Gain financial literacy before you start investing.Have an investment style to avoid investing in everything.Andrew's takeawaysYour financial background will affect how you view risks.Actionable adviceFind your own investment style and understand it before committing to it.Therapong's recommendationsTherapong recommends reading Capitalism without Capital and The Psychology of Money to understand the business world, globalization, and technology before investing.No.1 goal for the next 12 monthsTherapong's number one goal for the next 12 months is to start investing and building a retirement portfolio because he's about to retire.Parting words “Stick to your investment style and be patient. At the end of the day, investing is not difficult as long as you take emotions out of it and stay true to your style.”Therapong Vachirapong [spp-transcript] Connect with Therapong VachirapongLinkedInWebsiteAndrew’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: Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs.STORY: Carolyn lost a good chunk of her portfolio while doing active management.LEARNING: There’s nobody out there who can be consistently smart to beat the market. Know your money goals. Be careful of overconfidence bias. “We (doctors) think just because we’re smart at medicine, that we can beat the market, we can pick the best investments, and get rich.”Carolyn McClanahan Guest profileDr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs. She is an Investopedia Top 100 advisor, serves on the CNBC Financial Advisor Council, and writes for various publications. She is quoted regularly in the Washington Post, New York Times, and CNBC.Worst investment everCarolyn started experimenting with investing in the 90s when she was in her 30s. Her husband inherited a little money from his parents, and they invested it. The investment did super well because it was the mid-90s.Her husband didn’t want to be an engineer anymore. He wanted to be a track coach and a photographer. The couple tried to find a financial planner to help them plan their finances to accommodate the husband’s wishes. All the financial planners wanted to do was take over the couple’s money and charge a fee to put them in a bunch of mutual funds. They didn’t do actual financial planning.That’s why Carolyn decided to go back to school. She did stuff like day trading along the way, which was crazy. Carolyn also became a financial planner and got to learn about mutual funds. She spent so much time picking these great mutual funds that were supposed to grow beyond everything else. She also started investigating alternative assets.The stock market crashed in 2008-2009, and Carolyn suffered a massive loss due to active management.Lessons learnedEverybody is brilliant in a different way, but there’s nobody out there who can be consistently brilliant to beat the market.Know your money goals. For short-term money, invest conservatively. For long-term money, you can be more aggressive, but don’t try to pick what’s going to do best because you’re not going to know what that is—pick the whole basket.Andrew’s takeawaysActive management makes it very difficult to beat the market.Set up a passive investment account and let it grow.Be careful of overconfidence bias.Actionable adviceKnow your money goals and your time horizon, and make sure you have an investment policy statement that you follow and stick to through thick and thin, and you’ll be okay.No.1 goal for the next 12 monthsCarolyn’s number one goal for the next 12 months is to start her succession plan, so she’s hoping to hire three new advisors, grow the practice a little more, and get ready to launch herself in the next five to 10 years.Parting words “Just live life fully every day because you won’t get another one.”Carolyn McClanahan [spp-transcript] Connect with Carolyn McClanahanLinkedInTwitterFacebookWebsiteAndrew’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

In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this thirteenth series, they discuss mistake number 24: Do You Believe More Heads Are Better Than One? And mistake 25: Do You Believe Active Managers Will Protect You from Bear Markets?LEARNING: Invest conservatively instead of following the crowd. The best way to minimize the risks of a bear market is to hyper-diversify. “The only way to help minimize those risks and be safe is not to take risks, but then, you won’t get any actual returns, and it’ll be hard to reach your goals. The next best thing is to hyper-diversify.”Larry Swedroe In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Larry is the head of financial and economic research at Buckingham Wealth Partners. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this thirteenth series, they discuss mistake number 24: Do You Believe More Heads Are Better Than One? And mistake 25: Do You Believe Active Managers Will Protect You from Bear Markets?Did you miss out on previous mistakes? Check them out:ISMS 8: Larry Swedroe – Are You Overconfident in Your Skills?ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing WiselyISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake ExpertsISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s MoneyISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not KnowledgeISMS 30: Larry Swedroe – Do You Believe Your Fortune Is in the Stars or Rely on Misleading Information?ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You InvestISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return InvestmentsMistake number 24: Do You Believe More Heads Are Better Than One?One of the things Larry tries to teach people is about conventional wisdom when it comes to investing. Conventional wisdom is things that are generally accepted that no one questions because they typically apply in most fields.Larry says that the problem with using conventional wisdom when investing is that investing is a very different endeavor because you’re not competing one-on-one against someone; you’re competing against the collective wisdom of the market. And the conventional wisdom is that more heads are always better than one. But when it comes to investing, too many cooks spoil the broth; therefore, more heads are not better than one.To illustrate this, Larry quotes a study by professors Terrance Odean and Brad Barber, Too Many Cooks Spoil the Profits: Investment Club Performance. The study covered 166 investment clubs, using data from a large brokerage house, from February 1991 to January 1997. Here’s a summary of their findings, which include all trading costs:The average club lagged a broad market index by 3.8% annually, returning 14.1% versus 17.9%.60% of the clubs underperformed the market.When performance was adjusted for exposure to the risk factors of size and value, alphas (performance above or below benchmark) were negative even before transaction costs. After trading costs, the alphas were, on average –4.4% per year.Larry’s advice is to invest conservatively instead of following the crowd. Diversify your portfolio, make any big bets, and you’ll be fine.Mistake number 25: Do You Believe Active Managers Will Protect You from Bear Markets?Larry admits that active managers start with an advantage headed into a bear market because the passive systematic investor is going to earn the return of the market; they’re not getting in and out of the market. The market may have done very well before the bear market. They would have rebalanced their portfolio, taken some of those chips off the table, and sold high. And when the bear market hits, if they stay disciplined, they get to buy low and can even outperform the very funds they invest in.But active managers tout themselves to have the ability to get you out before the bear emerges from its hibernation and will get you back in before the bull gets into the arena again. So they can move to cash. However, there’s no evidence that active managers can protect you from bear markets.Larry says the only way to help minimize the risks of a bear market and be safe is not to take risks. But then, you won’t get any actual returns, and reaching your goals will be hard. The next best thing is to hyper-diversify.About Larry SwedroeLarry Swedroe is head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management. [spp-transcript] Connect with Larry SwedroeLinkedInTwitterWebsiteBooksAndrew’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.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever PodcastFurther reading mentionedLarry Swedroe and RC Balaban, Investment Mistakes Even Smart Investors Make and How to Avoid ThemPhilip E. Tetlock, Expert Political Judgment: How Good Is It? How Can We Know?Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral EconomicsLarry Swedroe, Think, Act, and Invest Like Warren Buffett: The Winning Strategy to Help You Achieve Your Financial and Life Goals