Lagniappe

Could we be looking at a year with a soft landing where inflation comes down without major economic pain? Greg and Doug dive into the potential of that outcome and the Fed’s role in it. They also look back on the EU energy crisis and its fear-based narratives and discuss how emotions/human nature affect the cycles of investment. 

Key Takeaways

Quotes

[15:41] - “In bull markets, everyone wants to own what's working. And in bear markets, nobody wants to own what's not working. That mindset just shifts. It's the greed component. And that mindset shift from greed to fear is pretty amazing to see in such a short timeframe.” - Doug Stokes  

[16:46] - “When you have your human nature starting to talk to you like, I don't want to own this, I'm fearful of this, or I have greed because my neighbor's making money. Usually, when those sentiments start to play in, you're better off doing the exact opposite.” - Greg Stokes

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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.

Happy New Year from Stokes Family Office. In this 1-year anniversary episode, Greg and Doug recap 2022 and look forward to 2023. They dig deeper past the forecasts and narratives to find factual reasons to be optimistic. The guys also discuss the importance of diversification across sectors and why pre-election years are historically bullish. 

Key Takeaways

Quotes

[04:17] - “The sentiment is bearish…that we're entering an imminent recession. The Fed is trying to introduce higher unemployment and trying to bring the economy down in order to temper inflation. That is the narrative at this point in time, and I'm sure that's going to change in the next couple of months, but just be reminded that sentiment does not always dictate reality.” - Doug Stokes  

[07:57] - “If you ignore the fundamentals, ignore the narrative, and just follow what actions are occurring in markets and look at history, then there's some positivity going along with that.” - Doug Stokes

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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.

This week’s guest is Perth Tolle, the founder of Life + Liberty Indexes and creator of the Freedom 100 EM Index (FRDM index). This freedom-weighted equity strategy is the first of its kind and uses personal and economic freedom metrics as primary factors in its investment process.

Doug and Greg chat with Perth about how/why she came up with the ETF, how the strategy performs vs. the market cap-weighted benchmarks, the risks of autocracies, China’s role/exposure, ESG, and more.

Key Takeaways

Quotes

[12:06] - “We believe that the freer markets will experience more sustainable growth, they'll recover faster from drawdowns, and they'll use their capital labor more efficiently. So not only do we want to exclude the autocracies and stay away from that autocracy risk, but we want to give a higher weight to freer markets, which we think are launch paths for the growth stories of the next decade.” - Perth Tolle  

[17:28] - “If you're looking at these index providers putting between 20 and 40% of an allocation to a single country that's ranking near the bottom from a freedom perspective…that seems like a pretty high risk to me.” - Doug Stokes

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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.

The Holidays bring lots of gifts, and one that we look forward to each year in the financial world is the upcoming year’s forecasts. On this week’s episode, Greg and Doug examine and discuss 2023 outlooks from several of the world’s largest asset managers. The guys take stock of a wild 2022, give their own predictions for next year, and debate how recency bias annually plays into these prognostications.

Key Takeaways

Quotes

[04:21] - “After you've had these sorts of declines, typically the markets are positive when you look at one year, three years, five years, 10 years. So,  if you're thinking about it just from a historical standpoint, you would want to be risk-on, and that means getting short-term on the bond side of the equation to the extent that you have fixed income exposure. And then you would want to have a higher allocation towards equities, because presumably if history is any guide, equities would outperform after these sorts of periods.” - Greg Stokes  

[25:40] - “It seems like every year there's a certain level of uncertainty that exists that has never existed before. It's that recency bias that makes you fearful of taking any action from an investment perspective because so many things could go wrong. It happens every single year. That's why you have to have a long-term game plan investment-wise to take your risks with money that you can afford to lose and develop an investment strategy over a period of time longer than 2023.” - Doug Stokes

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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.

In this week’s episode, Greg recounts his recent trip to Buenos Aires, from the food, geography, and people to their current financial situation. He speaks on the local impact of their economic struggles as well as investment opportunities and their incredible opportunity to make changes.

The guys also delve into year-end tax planning which is especially important this year due to the performance of mutual funds. They give tips on looking at your fund families' capital gains distributions and whether you should do some tax-loss harvesting before now and the end of the year.

Key Takeaways

Quotes

[13:57] - “The food in Argentina was so good. The drinks were great, the ambiance was great. But the governmental policies have really taken the country in a really bad direction. If things improve, then they really have everything they need from a pure natural resource standpoint to become a, you know, a very wealthy country like, like they once were.” - Greg Stokes

[18:13] - “It's just insane how some of these funds, even though they're flat or down or down big this year, are gonna have a negative tax impact to the client of, or the shareholder of that fund, even if that shareholder remains an investor. So the way that you get around this is by selling the fund before the capital gain is distributed, assuming that you don't have a gain in the fund itself.” - Doug Stokes

[21:09] - “If you can do tax loss harvesting to mitigate the capital gain impact from the rest of the portfolio, or if you're selling a business that's gonna have a capital gain and you could do tax loss harvesting to mitigate that impact from a capital gain perspective, that's a fantastic way to manage a portfolio for after-tax returns. Another fantastic way to do it is to not hold these funds that are gonna distribute capital gains at the end of the year, even though you might be down in the position. It just doesn’t make any sense.” - Doug Stokes

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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.

What effect does the character of a CEO have on a company’s performance? 

In this episode, Doug and Greg talk to Dan Cooper, Founder & CEO of ROC Investments. After working with Presidents, CEOs of large public companies, philanthropists, and extraordinary leaders from around the world, Cooper founded his firm with a character-based investment strategy, creating a model to quantify the character and integrity of public company CEOs. Focusing on the four pillars of character (integrity, responsibility, forgiveness, and compassion), the model is based on a Fred Kiel/Harvard Business Review Study that proved that high-character CEOs outperform low-character CEOs by 5x as return on assets.

The guys discuss Dan’s incredible story, from his work in returning Afghanistan to its people to his attempt to build the first standard gauge railway for the Tanzanian Central Corridor. They also dive into how his character-based model performs and his thoughts on taking a quantitative versus qualitative view of investments.

Key Takeaways

Quotes

[11:32] - “I developed the first character-based strategy in the early 2000s, and it was out of a conversation with Joe [Ritchie]. He said to me, man, I just wish I knew who the good ones were in the market…I mean the people with character because I think that has a huge impact on the long-term performance of the company.” - Dan Cooper

[15:22 ] - “I actually ended up hiring the firm that developed and did all the research for the book Return on Character, KOW International, which is an extraordinary company. We went out and tried to identify leaders today using some new and really exciting ways of doing it. First of all, they define character in a really wonderful way….the four pillars of character: integrity, responsibility, forgiveness, and compassion, and they prove that when CEOs behave with those four characteristics at a highly consistent level, performance is correlated.” - Dan Cooper

[19:30] - “What ROC Investments represents is kind of a new orientation for consideration, if you will, and how you spend and invest your money to get returns. And we think that not only do we hopefully outperform and do better than the market over time, but we also think if Wall Street wakes up and starts to see that there are a lot of people that care about this, it could have a positive effect. And maybe boards of directors start asking, why isn't my CEO on the list?” - Dan Cooper

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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.

The cryptocurrency industry is one of the most volatile and unpredictable industries in the world. In just a few short years, the industry has gone from being relatively unknown to being worth billions of dollars. 

The recent drama surrounding the FTX cryptocurrency exchange is a cautionary tale for the industry. It is a reminder of how quickly things can go wrong in the Wild West world of crypto and how easy it is for investors to get caught up in the hype.

In this episode, Doug and Greg talk about one of the latest and biggest market events, the fallout of cryptocurrency. As a part of the weekly news digest, the two also speak about inflation and how the FTX's fallout repeats history.

Key Takeaways

Quotes

[12:15] - "My prediction for next year is that if we have a bad market year, bonds will return to being diversifiers, and the 60/40 will be alive again." ~ Doug Stokes

[13:22] - "Even if we have a recession, the markets may still be up, and bonds may still be up, too, because bonds will have priced in the fact that inflation is coming down." ~ Greg Stokes

[14:17] - "Markets are the most up-to-date snapshot of human psychology and how people feel about buying and selling assets at any time." ~ Greg Stokes

[22:56] - "If you get excited about something, try to allocate a small percentage of your net worth to it. So if it doesn't work out, it won't sink the ship." ~ Greg Stokes

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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.

In this episode, Doug and Greg take a little break from the usual marketing discussion and talk about some other exciting things, basketball, and football. They are joined today by Scott Kushner. Scott is a leading expert on New Orleans sports and a columnist for The Times-Picayune. He is also the co-host of the Polk and Kush podcast, covering New Orleans' teams with a bend away from stats and bold takes.

Scott talks with Doug and Greg about the Pelicans, Tulane football, and the Saints. Aside from sharing his thoughts on New Orleans sports, he also speaks about where he sees the city's sports scene going.

Key Takeaways

Quotes

[04:09] - "This season is about connecting Brandon Ingram, Zion Williamson, CJ McCollum, Willie Green, and David Griffin and seeing how much potential there is. Before you can start saying where's the championship window, you want to see how all these things work together when they're all together. Cause we had just seen much of that in the first 10 games of the season." ~ Scott Kushner

[13:25] - "Whether or not the Pelicans will get incrementally better to fit that timeline is a question that no one can answer. But they have allowed themselves to say if this is the right group, they've got nothing but time to get it together, fail together in the playoffs, tweak what's right around the edges and then go out and try to win. And that is a rare thing." ~ Scott Kushner

[20:39] - "It doesn't do you much good if you aren't willing to use the value you have." ~ Scott Kushner

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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.

There has been a lot of talk about the possibility of a recession in recent months. While it is impossible to know for sure what the future holds, there are still silver linings to be found.

In this episode, Doug and Greg talk about how global investment managers view the market, how the Federal Reserve is at the center of the market's action, and the silver lining in today's economic climate.

Key Takeaways

Quotes

[07:34] - "Just a reminder to people that whatever the message you receive from the Federal Reserve, I would not take that as gospel by any means. They are all just human beings trying to interpret data." ~ Doug Stokes

[09:06] - "Even the people appointed to forecast are horrible at forecasting. There are billions of financial interactions daily. How do you forecast all of that? That's an exercise in futility." ~ Doug Stokes

[15:21] - "It's not good to talk about an economic slowdown. The positive is that if you say one shoe falls after the other, we're on the last shoe under the HOPE (Housing-Orders-Profits-Employment) framework. And so, you would expect a rise in unemployment, the last piece of the puzzle for this cycle. Then you start on to new." ~ Doug Stokes

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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.

Recent years have been tough on the economy. Many challenges have led to a slowdown in the global economy. Despite the negative impact of the economic slowdown, there are still reasons to be optimistic. Tough times don't last forever, and the economy will eventually recover.

In this episode, Doug and Greg talk about what financial experts have to say about inflation, the slowdown of today's economy, and how the global markets have been performing in the past weeks.

Key Takeaways

Quotes

[05:00] - "We manage portfolios based on people's lifetime cash flow needs and build buffers between their equity portfolio and their expected living needs. You would never want to trade your retirement or your nest egg on what's happening in the world." ~ Greg Stokes

[08:09] - "Regardless of where you look, it will be tough for people to buy homes at these rates." ~ Doug Stokes

[20:51] - "The only things that have worked this year are energy and cash. It was the most hated asset class for the last 10 years." ~ Greg Stokes and Doug Stokes

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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.