Critical Thinking Required

In this episode, we discussed concentration and risk in both investing and financial planning.  Nathaniel started the conversation by asking: why would anyone invest in your 20 fair ideas if you can invest in your best 5 ideas?  The key is to understand your circle of competence.  Like Nathaniel always says, I know what I know, and I know what I don't know.  Dan added, the most dangerous inve...

Today we talked about the bandwagon bias. It is a tendency to want to conform, be part of the crowd, to do things because others are doing them or believe in them.  It’s also known as herd mentality and is similar to groupthink. This is a bias we see daily in investing and in financial planning.  It happens so often because it's natural.  Nathaniel gave a couple of examples in investment hist...

In this episode, we invited Mike Steadman, a fellow Bunker Labs veteran entrepreneur, to speak on topics ranging from race to entrepreneurship.  Mike is the Founder of IRONBOUND Boxing, a veteran-owned company whose core purpose is to “change lives through boxing.”  We started the conversation with his experience in the Marines as an African-American infantry officer, and how he grew from there to...

It's part 2 of the Price vs Value fight!  We discussed how a different narrative can shape the price of the same company so differently, and thus the importance of understanding the fundamentals of the company rather than the stories that you’ve been told.  Dan asked a very interesting question: with more and more non-professional “do-it-yourselfers” entering the market, will that enlarge the...

In this episode, we talked about stocks' Price vs Value.  Price is simply what the market is willing to pay today, at the moment; price is arbitrary and value is fundamental.  Nathaniel explained why they are often different, and the disconnect between these two is what a good investor looks for: a cheaper price for a higher value.  It doesn’t matter what kind of investor you are: growth-focu...

In today's episode, we talked about loss aversion. In cognitive psychology and behavioral economics, loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains.  Tim asked Nathaniel two questions: 1. what would you choose: guarantee to get $900, or a 90% chance of getting $1000, but a 10% chance of getting nothing? 2. what would you choose: guarante...

In today's episode, we talked about the restaurant industry during COVID-19 with one of our local restaurant owners Lance Ratze.  Lance is the owner and creative force behind Yola’s Café.  He reaches into the heart of the community with community events, local non-profit support, and strong business networking.  He briefly talked about what kind of difficulties restaurants are facing during t...

For Part 2 of “What is a Financial Planner”, we talked about our view on some industry credentials and what they provide.  Tim, who has both CPA and CPWA credentials, shared his experience on both courses.  While they were helpful, he said, nothing trumps self-teaching and life-long continuing education.  He added, the most difficult, and yet most fascinating part of financial planning, is the qua...

In this episode, we are going to talk about what a financial planner is.  Tim briefly explained the history of how the financial planning industry evolved from passive planning to actively giving out advice.  Dan mentioned that here in LBW, we believe a proper financial planner's role should be both a financial consultant and a family office manager.  With that in mind, we actively choose not...

In this mini-series, we are going to talk about five cognitive biases and how they affect us in our financial decisions.  Anchoring Bias refers to when a person latches onto the first piece of information they see or hear and end up being an "anchor" for new information that follows.  Nathaniel mentioned how that effects him then it comes to investing in the stock market.  To combat this...

In this episode, we did some self-reflecting exercises with each other.  Dan shared his experience regarding being at home for over a month and a half, he got the chance to figure out what's important to him, and what shocked him in terms of "I didn't know I used to spend that much on ABC!"  Tim agreed and mentioned that it's extremely important for us to think about our f...

In the second part of the "Doctor is In" episode, we asked Dr. Ross Goldberg a couple of questions about COVID-19: Will the cure be worse than the disease?  What is herd immunity and will it work?  What's the future for our healthcare system and medical facilities?  Can tech change the industry or is it bigger than that?  Not only has he been working the healthcare system for over 2...

In this episode, we invited one of our good friends Dr. Ross Goldberg, M.D., FACS, who is the Specialty Ambulatory Medical Director and Vice-Chairman of the Department of Surgery at Valleywise Health in Arizona.  With his 20 years of experience working in the U.S. healthcare system, Ross discussed the impact of COVID-19 both economically and health-wise, and how they are tied together.  Even thoug...

In this episode, we invited one of our dear friends Jon Crawford, who owns and operates a third-generation family business in the oil and propane industry, to talk about the crazy oil market.  He talked about the historical background of the oil price war between Russia and Saudi Arabia, and what role the U.S.'s oil industry played in the most recent oil price rollercoaster.  Like everything...

In part 2 of this episode, we continue speaking to our dear friend Jon Crawford, who owns and operates a third-generation family business in the oil and propane business, about the most recent ups and downs in the oil industry.  We talked about the oil price going forward; potential reverse effects of demand destruction, and the decrease in supply; the U.S.’s oil independence, and the effect on th...

Due to the recent market volatility, some people have asked us: why didn't you sell AAA when it hit $80?  Why didn't you buy BBB when it collapsed to $1?  Market timing sounds simple enough, but can it be done?  Per JP Morgan Asset Management, did you know that from Jan. 3, 2000 to Dec. 31, 2019 (~almost 20 years, 5040 trading days total), if you were fully invested in the S&P 500, y...

In the past five weeks, unemployment claims have climbed to 26 million as panic flooded the market due to COVID-19 and an unpredictable future.  A lot of business owners are in a pickle: on one hand, the business may not survive without some serious budget cuts, like laying off employees; on the other hand, without their trusted associates, no business can succeed and improve to the next level.  W...

A lot of clients and friends have been asking us recently: "I'm not worried about the market, I'm actually excited!  But how do I take advantage of the crisis?  I've heard that I should refinance my mortgage, is it true?  Should I buy Amazon, Netflix or Zoom?  What should I do?"   All very good questions.  In this episode, we spoke about how to take advantage of a market d...

As one said, small business isn't for the faint of heart; it's for the brave, the patient, and the persistent.  This is particularly true in today's market: while COVID-19 affects almost every corner of the world, small business owners are getting more and more worried and confused about their future.  In this episode, we talked about the importance of having a professional network...

This episode is about "positioning."  With the CoronaVirus pandemic, a lot of people are worried about their job security, health benefits, inability to keep a job, or having to go to work while your kids no longer have daycare.  What do you do?  We can not emphasize enough the importance of an emergency fund.  With it, you can ride the market without sacrificing (too much of) your life...

When Mr. Market is depressed, our Portfolio Manager Nathaniel Leach always likes to say: “The British had it right during WWII: we just need to ‘keep calm and carry on.’” We appreciate his sentiment and couldn't agree more, but we wanted to give a brief update on some recent news. In the last two weeks, we have seen a market sell-off. Fears of a Coronavirus (COVID-19) pandemic has placed the...