Lagniappe

Russia’s invasion of Ukraine is a humanitarian crisis that’s gripped the globe. While difficult to comprehend on a human level, the economic impact of a widespread European conflict can be equally as complicated to unpack.

From inflation to rising gas prices to seemingly unpredictable markets, the state of our economy is enough to make most panic. Luckily, understanding why the Russian-Ukraine conflict has increased inflation and what our government is doing to combat rising costs can dissolve some of that panic.

This week, Doug and Greg discuss the recent market volatility and ramifications of the Russian invasion of Ukraine, unpacking why globalization impacts interest rates, the surefire way to combat market volatility, and why it’s pointless to panic about an imminent economic recession. 

Key Takeaways

Quotes

[09:29] - “The silver lining here is that – and we talked about this on a prior podcast – households are in fantastic shape and debt service payments, specifically mortgage as a percentage of disposable income, were at all-time lows before rates crept up.” ~ Doug Stokes

[15:49] - “The range of outcomes is so wide here that I think diversification is the ultimate winner in this sort of framework.” ~ Doug Stokes

[17:47] - “Oil and commodities really have been vindicated as an asset class the last couple years and it really goes to show the importance of diversification. Because the human instinct is to go with what’s worked in the past and that absolutely has not worked in the past but it’s working like magic this year.” ~ 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 talk with Peter Ricchiuti, Founder and Director of Burkenroad Reports.

Peter started Tulane’s nationally acclaimed student stock research program Burkenroad in 1993. Since then, he has mentored hundreds of students about underpriced and overlooked stocks in southern states. Before that, Peter also served as the Chief Investment Officer for the state of Louisiana.

Peter talks with Doug and Greg about overlooked stocks, the impact of the pandemic on the decline in birth rate, and trends in the markets of different states, especially New Orleans.

Key Takeaways

Quotes

[20:31] - “I think one of the big problems we have in the country is tremendous income, inequality, wealth inequality, economic opportunity inequality. And I think that's leading to a couple of big trends.” - Peter Ricchiuti

[22:55] - “Indexing in other asset class, small-cap, mid-cap stocks, international, they just look flat out more inviting. On the international side, I think the average American has 90% to 95% of their money domestically. And yet, 50% of all stocks are actually non-US. And these countries are growing faster.” - Peter Ricchiuti

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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.

Argentina just struck a deal with the International Monetary Fund (IMF) to give the South American country some “breathing space” for the next few years to pay off debt. From an Argentinian expert’s perspective, how is it looking for the economy and more importantly, to its people?

In this episode, Doug and Greg talk with Santiago Solanet, Senior Investment Analyst at BlackTORO Global Investments. Santiago is known for monitoring and analyzing the local and global economic situation of the Argentinians.

Santiago talks with Doug and Greg about understanding Argentinian markets—from the recent IMF agreement to peso depreciation to its political environment.

Key Takeaways

Quotes

[06:47] - “The ‘most’  problem is, with every month that passes, with your salary, you can buy less and less goods as compared to the previous months. In Argentina, every six months, we have a compensation—we actualize the salary, but we always run it back against inflation.” - Santiago Solanet

[15:58] - “In my opinion, we need a change in the government, change of power, because, in this government, we don’t have trust or confidence or credibility. You're not going to solve anything because you might say, well, we are going to change the economy plan, we are going to have lower taxes—but the markets, they don’t believe that.” - Santiago Solanet

[29:23] - “I think there are good opportunities in Argentina. We have to be very picky. There are companies that have huge problems that are too risky.” - Santiago Solanet

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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 talk with Jamie Catherwood, Client Portfolio Associate at O’Shaughnessy Asset Management. Jamie has a deep fascination with and expertise in finance history. Throughout the years, he’s shared finance content that goes in-depth to help investors make better and more evidence-based financial decisions.

Jamie talks with Doug and Greg about the importance of financial history in strategizing portfolios, and insights on innovation entering deep value territory.

Key Takeaways

Quotes

[33:27] - “I think that the government has some role in markets, but obviously too much of a presence can kind of stifle innovation. Too much regulation can hurt markets, but I think there definitely needs to be some level of regulation because otherwise, frauds would be able to persist with kind of no threat from anyone stepping in.” - Jamie Catherwood

[39:52] - “Once you read enough about financial history and you kind of see all these crazy bubbles, it kind of gives you more perspective and makes you step back and say, ‘Is this going to be one of those? And it makes it easier to not get swept up in the next hot thing.” - Jamie Catherwood

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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 talk with Cullen Roche, Founder and Chief Investment Officer at Discipline Funds.

Aside from advocating for rebalancing portfolios with low-fee, tax-efficient funds, Cullen also writes about the macroeconomy and investing strategies through his blog, Pragmatic Capitalism. Cullen also advises on the overall impact of inflation in the current market.

Cullen talks with Doug and Greg about inflation, economic cycles, and countercyclical indexing with ETFs.  

Key Takeaways

Quotes

[20:20] - “The thing about deflation is it tends to occur, especially the really traumatic ones, inside of debt bubbles like the housing crisis. The thing that made that so frightening was that you had balance sheets collapsing from debt deflation, and that is really traumatic because it's the exact opposite of money printing — it's money destruction. And that is a very unnatural process inside of any long-term economic period.” - @cullenroche

[38:52] - “A lot of people get in trouble because they get overly confident about potential outcomes and they start saying, ‘Oh, well, hyperinflation is coming, the government's ruining everything, so I need to just own nothing but Bitcoin.’ And those sorts of maximalist positions can be really damaging because if you're wrong, your outcome is asymmetric in a really potentially catastrophic way.” - @cullenroche

[41:59] - “I'm not just an advocate of diversifying globally. I'm actually an advocate of diversifying globally based on what the actual full market capitalization is.” - @cullenroche

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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 talk about the effect of electoral party systems and politics on the markets, and the promising investment opportunities in New Orleans.

Key Takeaways

Quotes

[03:48] - “That's the beauty of the American system, right? There are always ebbs and flows between one party or another, or one prevailing ideology or another. It's a good or a bad thing politically, but generally, a moderation between one party or the other is good in my opinion.” - Doug Stokes

[07:59] - “Markets don't like surprises. For example, we all saw that in March of 2020, when the world was coming to an end—the stock prices were falling off a cliff because there was so much uncertainty.” - Greg 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.

Doug and Greg talk about why the cure to inflation is inflation, and why US stocks continue to outperform international stocks.

Key Takeaways

Quotes

[14:32] - “In 2012, emerging markets were up and commodities were down. In 2013, small-cap US stocks were up big and emerging markets were down. The whole idea behind this is it's important to stay diversified and not put all of your eggs in one basket.” - Greg Stokes

[19:16] - “It's important, number one, to diversify because nobody knows what's going to be the best performer over any given period of time. And just because it's the best performer one year doesn't mean it's going to be the best performer the next year.” - 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 discuss everything you need to know about the blockchain, cryptocurrency, and digital assets—its speculative market, its stance against looming inflation, and its promise to be the currency of the future.

Key Takeaways

Quotes

 [04:15] - “In the last 10 years, I would imagine that people are hitting their retirement objectives earlier than they were planning on if they were doing any planning, just because of the growth in markets.” - Doug Stokes

[11:18] -  “That particular investment style— the bottom-up, buying earnings, buying companies that have consistent earnings —was really not in favor until the last 18 months or the last seven to 10 years. But it has definitely come into favor recently.” - Greg Stokes

[14:27] - “We can see on both sides that when things are not going well in markets in general, I think people are just dumping everything. And instead of viewing that as sort of a hedge on overreaching government and inflation, it's basically just a complete speculative bed right now.” - 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 episode, Doug and Greg talk about the rate hiking cycle as we enter 2022, the truth about debt and the affordability of housing, the impact of monopoly capitalism, and the new business investor mindset amid a pandemic.

Key Takeaways

Quotes

[03:51] - “There is really no rule of thumb in markets. If you think about it, do you really think that the collective knowledge of the millions and millions of investors that are participating in markets are not aware that we're in a rate hiking cycle now, or at least entering one? There's just so much going on in the markets beyond just one of these particular narratives that drive prices.” - Doug Stokes

[10:55] - “In terms of Apple, Amazon, Google, and Facebook, their size and their company have an ingrained nature in our lives─I don't see that as a negative. And I don't see them as respective monopolies, as purely anti-competitive. I think they've improved our lives in crazy ways. And I think they still continue to do so.” - Doug Stokes

[19:38] - “A lot of it is going to come from leadership. The CDC just came out and said quarantine, if you're exposed or have COVID, is five days now, down from 10. In the midst of an Omicron wave, I think that the signal the government is sending, which I think is the right signal, is that we need to start working on the next phase of this getting back to, nearly, or 100% of what previous life was like.” - 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.

Investors’ decisions are mostly based on financial predictions made by so-called experts. So, when the news broke that we were about to enter a pandemic, investors and advisors were in shock. How do investors move forward when modern society is suddenly afflicted by an uncontrollable peril like COVID-19?

In this episode, Doug and Greg talk about the risks of poor financial forecasting, the truth about market corrections, and the true indicators for smart investing practices. 

Key Takeaways

Quotes

[10:26] - “This has been such a shock to society, especially a society that's been used to general comfort throughout life. I think if this would have happened 100 or 200 years ago, people would have just dealt with it and moved on. But now we're basically protected from most dangers in the world and modern society. And so having an uncontrollable danger like this is a complete shock to the system, and I think it's going to take time to come out of it. And I'm hopeful sooner rather than later.” - Doug Stokes

[12:35] - “It's impossible to forecast what's going to happen in the future. We were in the trenches dealing with human psychology and individuals that were dealing with some very stressful situations in March of 2020, and nobody could've forecasted that we were going to run into a pandemic.” - Greg Stokes

[22:17] - “As an investor, if you can't take the 10% or maybe even 20% correction in stocks─because it's going to happen statistically once every year with 10% and once every six years at 20%─then what's your alternative?” - 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.