February 08, 2023

Enhanced Diversification is the Name of the Game

27 minutes

The Stokes’ consistently lean toward the optimistic side of thinking, but this week, they’ll take a look at data/opinions on both sides of the coin.

The guys examine the national focus shifting away from the Fed and toward corporate profit margins, why companies becoming more efficient is a bullish sign for the economy, and how diversification is the right strategy no matter the economic outlook.

Key Takeaways

[00:35] - Recapping the earthquake in Turkey & Syria

[05:20] - Shifting the focus from the Fed toward corporate profit margins

[08:53] - Potential of a recession without a major crash in asset prices

[10:18] - Number of employees needed to make $1M in revenue now vs. 1990

[14:18] - A look at the other, more pessimistic viewpoint

[17:31] - The importance of diversification during economic downturns

[19:04] - The decline of amateur investors and day traders

[21:57] - How Chad Ochocinco saved millions buying fake jewelry and flying Spirit

Quotes

[09:44] - “Diversification is basically always saying that you're sorry because one part of the portfolio is not going to be working. So whether you're in stocks, bonds, real estate, cash, gold, whatever, a diversified portfolio should be set up for various outcomes with the emphasis on, we tend to lean more towards optimism than pessimism in our allocation approach.” - Doug Stokes

[18:15] - “It's always good to look at alternate viewpoints and there are a lot of smart people on all sides of the equation. Usually, the ones that try to try to scare you positively or negatively are the ones to ignore.” - Greg Stokes

Links

WSJ: The rising death toll from the Turkey-Syria earthquake

Bloomberg: Powell says further rate hikes needed

Goldman Sachs cuts the subjective probability that the US will enter a recession

BoA: number of workers needed to generate $1 million in revenue.

Michael Kantro: A historical look at “soft landings”

WSJ: The retreat of the amateur investor

Chad Ochocinco saved most of his NFL salary by flying Spirit and wearing fake jewelry.

Morgan Housel: The Psychology of Money

Connect with our hosts

Doug Stokes

Greg Stokes

Stokes Family Office

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Disclosure

The information in this podcast is educational and general in nature and does not take into consideration the listener's personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.

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