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Speaker 1: Hey, buddy, how's it going. I'm great.

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Speaker 2: This is another best the episode. We hope if you're

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Speaker 2: listening that hopefully you have also been able to take

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Speaker 2: some time off. That's what we're doing this week, taking

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Speaker 2: some time off. Obviously, we know that's not everybody's situations.

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Speaker 2: There's a lot of folks where they don't have that option.

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Speaker 2: But man, we are so fortunate and blessed to be

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Speaker 2: in a position to where we can take a little

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Speaker 2: bit of time off. We kind of joked about how

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Speaker 2: obviously we've recorded these ahead of time, but on the

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Speaker 2: day that we're recording this, you and I, we actually

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Speaker 2: stole away from the office a little bit. Got to

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Speaker 2: go up to where our little dudes go to school

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Speaker 2: for like the Christmas contents four or five hours every

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Speaker 2: day and they put on a little Christmas contract. That's right,

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Speaker 2: And you know what, we could have stayed here in

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Speaker 2: the office and said, you.

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Speaker 1: Know what, let's yeah a lot to do.

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Speaker 2: Let's try to squeeze a few more dollars out of

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Speaker 2: the website, Like what are some different ways that we

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Speaker 2: can cut some costs, cut some expenses. But instead it's

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Speaker 2: also important to not only invest your dollars and to

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Speaker 2: work on increasing your net worth, but to invest in relationships, man.

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Speaker 2: And you know this is like, it's a meme, it's

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Speaker 2: a trope. Right when you're lying on your deathbed, are

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Speaker 2: you gonna wish you had a few more dollars in

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Speaker 2: your bank account? Not really, But you know what I

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Speaker 2: am gonna remember is us sitting there video and our

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Speaker 2: dude singing jingle bells while they're waving out the camera,

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Speaker 2: snapping photos and video. So we hopefully that that's something

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Speaker 2: that you're able to do this holiday season as well,

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Speaker 2: is invest in the relationships of those around you.

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Speaker 1: You just said in video, but it sounded like in video,

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Speaker 1: and so this this episode is actually all about investing

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Speaker 1: in single stocks. And the hottest stock of the year

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Speaker 1: was in video. Nice segue, Betty, I wish i'd bought

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Speaker 1: that when I was in my mom's womb. I forgot

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Speaker 1: to do that, sadly, So I'm not partaking some of

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Speaker 1: the benefits. But I think there's a lot of fomo

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Speaker 1: in that space when it comes to single stock investing.

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Speaker 1: And it's like, well, why don't I just invest in

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Speaker 1: those hot tech companies? And we're going to tell you

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Speaker 1: maybe why that's not the best route to take, why

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Speaker 1: we prefer index funds, and the many downsides of investing

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Speaker 1: in single stock. So enjoy this besty episode and thanks

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Speaker 1: for listening. Welcome to Hat of Money. I'm Joel and

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Speaker 1: I am Matt, and today we're discussing the heralds of

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Speaker 1: investing in individual stocks.

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Speaker 2: Yeah, buddy, this is gonna be an investing episode one

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Speaker 2: hundred percent.

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Speaker 1: Here at how to Money.

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Speaker 2: I feel like we try to we keep it well rounded.

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Speaker 2: We talk about all sorts of all the different things

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Speaker 2: that have to do with your money, how you earn it,

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Speaker 2: and how you spend it, how you invest it. But

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Speaker 2: this is one percent investing. We're gonna get like knee

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Speaker 2: deep in it, elbow deep in it.

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Speaker 1: Yeah, well, I feel like both. If there's if there's

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Speaker 1: any topic that people have a lot of questions about

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Speaker 1: that we consistently get pushed back on, it is this one.

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Speaker 1: It is. It is about investing in individual stocks, and yes,

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Speaker 1: spe typically individual companies. A lot of people are like, hey, listen,

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Speaker 1: like is it I don't think it's dumb? Or why

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Speaker 1: do you guys like advise against it? And so it's

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Speaker 1: time to clarify and kind of go into depth about

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Speaker 1: why it's not our favorite method of investing. That's right,

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Speaker 1: real quick.

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Speaker 2: Though, I wanted to share a quick this is potentially

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Speaker 2: a money saving tip so lately. So I was in

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Speaker 2: the shower last night getting ready to shave. Do you

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Speaker 2: shave in the shower, by the.

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Speaker 1: Way, I do not, Okay, came in front of my

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Speaker 1: mirror after but I very rarely like shave. Shave.

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Speaker 2: So yeah, well, neither you nor I have much growth.

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Speaker 2: But but for me, I was getting to the point

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Speaker 2: to where I needed to shave. You know, my miss

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Speaker 2: scraggly patchy beard was looking particularly scraggly. And I love

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Speaker 2: shaving in the shower because it's already warm, the hairs

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Speaker 2: are soft. I got the little mirror that I stick to,

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Speaker 2: the stick to the side of the shower. Anyway, I've

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Speaker 2: been using like this shaving lotion. I am one hundred

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Speaker 2: percent on board with that as opposed to the shaving cream,

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Speaker 2: because shaving cream it's just air, you know, like you

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Speaker 2: get the big white that doesn't help you, that doesn't

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Speaker 2: help you.

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Speaker 1: Out helps me. It works for me, you think it does,

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Speaker 1: but it actually doesn't. Okay.

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Speaker 2: Anyway, I ran out of my actual shaving lotion, and

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Speaker 2: I needed to shave, and I thought, you know what,

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Speaker 2: actual hair conditioner. It's a lot like the shaving lotion

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Speaker 2: that I use, and let me give that a shot.

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Speaker 2: So I got it in on my face and shaved. Dude,

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Speaker 2: it was an incredibly comfortable shave.

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Speaker 1: Okay, And it.

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Speaker 2: Turns out like I don't I don't think there's much

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Speaker 2: difference between shaving lotion in actual hair conditioner because it

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Speaker 2: gets the hairs all nice and soft. So I guess

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Speaker 2: this condition would be cheaper too, Yes, because in my case,

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Speaker 2: I found myself, you know, I didn't have any shaving

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Speaker 2: lotion on hand.

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Speaker 1: But what I'm saying is like I'm not even sure

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Speaker 1: if I'm going to go back, because like you get.

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Speaker 2: A giant bottle of hair conditioner for like a few bucks,

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Speaker 2: you know, versus like an eight ounce tube of shaving

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Speaker 2: lotion from special manufacturers who sell shaving stuff, it costs

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Speaker 2: much much more.

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Speaker 1: You're saying, it's just all packaging and branding basically, and fragrance,

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Speaker 1: right because you know that's one of the things they

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Speaker 1: got going is that sandal would smell. It makes you

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Speaker 1: smell more like a man, as like I just use

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Speaker 1: my wife's.

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Speaker 2: I just use Kate's shampoo and conditioner just well, like honestly,

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Speaker 2: whatever she buys I use.

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Speaker 1: I don't really care why you smell like a flower

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Speaker 1: pedal today, I smell like roses. Smell very nice.

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Speaker 2: Anyway, I wanted to share that because if you find

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Speaker 2: yourself in a pinch like this, give it a shot.

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Speaker 2: And I will argue with anybody that's shaving cream like

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Speaker 2: the traditional shaving cream is completely it's just it's all

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Speaker 2: for show. Like literally, you're lathering it up. It doesn't

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Speaker 2: do anything because when you shave, you end up just

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Speaker 2: like wiping it off your face as opposed to the lotion.

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Speaker 2: I don't rubs into your skin, like the whole point I.

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Speaker 1: Just shaved with that traditional shaving cream recently. You have

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Speaker 1: not experienced oh great, yeah whatever, it looked amazing, because

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Speaker 1: the whole point is for it's to moisturekee your skin.

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Speaker 1: That way, you're not stripping your skin and dry out

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Speaker 1: some of that's left on your face afterwards. Yeah, especially

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Speaker 1: where it's like one inch thick. Yeah, that's really absorbing

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Speaker 1: into your skin, all of the excess outer shell of

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Speaker 1: your shaving cream. I don't know why you're hating on

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Speaker 1: those traditional foamy shaving creams, because I think they work

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Speaker 1: well if you enjoy the traditional shaving cream, but you

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Speaker 1: after you use your conditioner, and you know what, if

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Speaker 1: other people want to give a shot too, I'm just saying,

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Speaker 1: give a ship, give it a shot. If it's going

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Speaker 1: to save you a few bucks, like, go for it.

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Speaker 2: Yeah, And this is a tip whether you're shaving your

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Speaker 2: face or your legs, So this is something.

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Speaker 1: For everybody else, whatever you want to shave. Tommy boy. Yeah,

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Speaker 1: it's a good tip and that pretty much anybody can use.

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Speaker 1: I love it if they're so inclined. All right, well

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Speaker 1: let's move on. Matt. Let's mention the beer that we're

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Speaker 1: having on this episode. This is Trappist Roach for ten,

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Speaker 1: which is a quad trapistis I mean, I can't really

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Speaker 1: pronounce these sorts of what can say? It's a Spanish beer, No,

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Speaker 1: of course it's not Spanish, Matten. This is South of

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Speaker 1: the Boarder beer, is a Belgian style beer. And you know, actually,

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Speaker 1: at the end of the episode, I will talk a

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Speaker 1: little bit about the Trappist monasteries that make these kinds

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Speaker 1: of beers because I'm kind of fascinated with them, and

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Speaker 1: this beer is kind of a classic. I'm looking forward

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Speaker 1: to sharing with you on the episode today. That's right,

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Speaker 1: all right, Well, let's let's move on get onto the

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Speaker 1: subject at hand. The topic today is the perils of

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Speaker 1: investing in individual stocks, and Matt, the word peril makes

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Speaker 1: me think of a difficult yet epic journey, and right

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Speaker 1: now I'm reading The Hobbit with my eight year old.

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Speaker 1: Oh yeah, we're like three quarters of the way through,

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Speaker 1: and the journey they undertake is of course a perilous one,

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Speaker 1: right They There are goblins, there are dragons, they are

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Speaker 1: are enormous wolves and spiders like I can't even imagine

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Speaker 1: seeing one of those kind of spiders that Tolkien describes

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Speaker 1: in real life. It's this treacherous journey, even through like

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Speaker 1: these these dark woods where the sun doesn't even shine. Yes,

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Speaker 1: And I don't want to spoil anything for those those

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Speaker 1: of you haven't read it. I don't think. I think

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Speaker 1: spoilers are okay with a book that's like decades and

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Speaker 1: decades old, But you can't spoil them. No, I won't, so,

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Speaker 1: but yeah you should. The thing is, everything does end

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Speaker 1: up okay for the travelers in the end and you

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Speaker 1: just said no spoilers, Well, just like everything else come

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Speaker 1: on except for the Titanic that doesn't know well, but

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Speaker 1: like no spoilers and they like gives away the idea

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Speaker 1: you're not gonna get well, you know, people need to know. Yeah,

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Speaker 1: So the thing is, you know, when we're talking about

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Speaker 1: investing in single stocks, the chance that this perilous journey

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Speaker 1: ends up with a happy ending is is much less likely.

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Speaker 1: I know that some listeners they're really into investing in

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Speaker 1: some specific companies they admire or that they think maybe

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Speaker 1: have a lot of upside, and you know what, to

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Speaker 1: a certain extent, different strokes for different folks. Talk about

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Speaker 1: that later. But yeah, basically, since buying just a single

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Speaker 1: share or a fractional share even now of an individual company,

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Speaker 1: it's become as easy as putting your pants on. The

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Speaker 1: allure has grown quite a bit for a love shaving

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Speaker 1: your face or shaving your face with conditioner, you know,

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Speaker 1: And that's why we figured we needed to cover it

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Speaker 1: in depth. Today, I think it's becoming just more widely

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Speaker 1: appealing to lots of folks. Yeah, that's right.

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Speaker 2: It's easier than ever to think of yourself as a

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Speaker 2: fancy pants investor with all of the sophisticated tools that

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Speaker 2: any one of us has at our fingertips, or with

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Speaker 2: the ability to like easily drop in on individual company

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Speaker 2: quarterly earnings reports. That's becoming popular, or just simply because

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Speaker 2: it's more accessible than ever to invest with individual companies

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Speaker 2: with apps like Robinhood where you can buy, where you can.

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Speaker 1: Sell for free.

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Speaker 2: And it's also easier than ever to become a day

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Speaker 2: trader right because of these things. So we've increased the

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Speaker 2: perilous nature in magnitude and in frequency. Folks are doing

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Speaker 2: it more often. We've made this pretty clear on the podcast,

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Speaker 2: but a listener, John, he actually reached out to tell

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Speaker 2: us why he completely disagreed with our stance on individual stocks.

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Speaker 2: He's actually done incredibly well, specifically holding Tesla and Apple.

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Speaker 2: It's it's made a big difference in his wealth building journey.

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Speaker 2: That's great for him, but we are still not fans,

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Speaker 2: and so in this episode we're going to tackle some

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Speaker 2: of the most common arguments and we'll talk about why

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Speaker 2: we ultimately disagree. We believe that single stock investing is

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Speaker 2: unnecessary and it can often be problematic.

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Speaker 1: Yeah, and we have no problem with John doing what

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Speaker 1: he does. But it's one of those things where you know,

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Speaker 1: we're not going to necessarily change the way we think

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Speaker 1: just because someone disagrees with us, and it's worth giving

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Speaker 1: our thoughts because really, yeah, of course, at the end

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Speaker 1: of the day, make your own decision, but we want

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Speaker 1: to offer up, you know, our best takes on why

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Speaker 1: we think individual stock investing is kind of a fool's errands. Yeah,

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Speaker 1: that's right, But really, Matt, before we get to that,

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Speaker 1: let's actually maybe talk about some of the pros of

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Speaker 1: single stock investing, because you know, again we try not

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Speaker 1: to be ideologues. Let's talk about maybe some of the

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Speaker 1: best arguments for investing in single stocks and why it

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Speaker 1: might make sense. And interestingly enough, you know, we don't

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Speaker 1: completely disagree with folks on some of the reasons that

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Speaker 1: that single stock investing does make sense, because you know,

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Speaker 1: oftentimes the argument is made to only invest in individual

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Speaker 1: companies when you've done your research. They'll make that argument,

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Speaker 1: and it's like, well, I think I can agree with that, right,

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Speaker 1: don't invest It's good to do your research in single

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Speaker 1: stocks if you haven't done your due diligence on the

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Speaker 1: front end. And yeah, just because you like Nike's new

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Speaker 1: sneaker that they come out with, Right, That doesn't mean

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Speaker 1: that you should buy Nike stock, right, And you need

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Speaker 1: to have a method for picking undervalued companies. Although we

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Speaker 1: would also say it's easier said than done. Right, that

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Speaker 1: sounds nice, Do your research, make sure you know what

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Speaker 1: you're getting into. But even that isn't isn't easy to do?

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Speaker 2: Yeah, No, it takes a lot more than just really

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Speaker 2: liking a service, really liking a product. Seeing maybe a

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Speaker 2: write up like a sneak peek, a preview like on

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Speaker 2: maybe a magazine that you get and they're talking about

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Speaker 2: like a new car or something like that, and you

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Speaker 2: might think, oh, well, that means I should buy stock

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Speaker 2: in that company because this is going to be awesome.

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Speaker 2: Just because you have impeccable the world by storm, right, Yeah, yeah,

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Speaker 2: I was gonna say, like, just because you have amazing taste,

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Speaker 2: like impeccable taste, that doesn't mean that a is going

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Speaker 2: to be a successful product launch.

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Speaker 1: It doesn't mean that be other people will as well.

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Speaker 2: And even if other people do like the product, that

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Speaker 2: doesn't necessarily mean that that company is going.

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Speaker 1: To do well.

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Speaker 2: That you're going to see the price of the of

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Speaker 2: the shares of that company increase in value. Another prudent

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Speaker 2: approach to single stock investing might be to keep it small.

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Speaker 2: This is one that we actually agree on because if

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Speaker 2: you're you know, if you're going to invest in a

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Speaker 2: handful of companies, you don't want to bet the entire farm.

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Speaker 1: Right.

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Speaker 2: We'll talk more about this later, but if you want

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Speaker 2: to invest in single stocks, it's best to just dabble

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Speaker 2: a little bit. I kind of think of it like

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Speaker 2: going to Vegas. If you take two hundred and fifty bucks,

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Speaker 2: maybe you leave your your debit card at home. It's

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Speaker 2: going to be much much less risky. It could even

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Speaker 2: be a lot of fun. However, if you take out

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Speaker 2: say ten thousand dollars with the option to then take

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Speaker 2: out more while you're there, there's.

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Speaker 1: Gonna be a lot more room for regret. Yeah, you

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Speaker 1: go to like a title loan company, and you know,

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Speaker 1: you you take out money on your car. I don't know.

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Speaker 1: There's all sorts of things you could do that would

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Speaker 1: make a trip to Vegas like take it from fun

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Speaker 1: to being like ridiculously risky. Yeah, exactly.

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Speaker 2: So, for instance, a small investment in Navidia or Tesla

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Speaker 2: just like five or six years ago, Like that looks

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Speaker 2: amazing now, and because of their incredible rates of growth,

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Speaker 2: you didn't have to invest a ton of money in

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Speaker 2: order to see a meaningful bump in your net worth.

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Speaker 2: Even just a small investment in one or two companies

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Speaker 2: can pay off for you if you're lucky. But at

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Speaker 2: the same time, I think the argument of keeping it

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Speaker 2: small is almost like an anti argument for single stock investing,

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Speaker 2: because the idea is that you know better, right, if

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Speaker 2: you know the truth. And I know we're supposed to

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Speaker 2: be talking about pros to single stock investing, it's really hard.

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Speaker 1: We'll get the cons in a minute, man, And it's

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Speaker 1: hard to get to the cons.

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Speaker 2: But like, if you know that this is that you're

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Speaker 2: going to see outside returns, why would you go small?

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Speaker 2: Why would you just dabble? Because if you know, if

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Speaker 2: you are convinced that this is going to be the case,

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Speaker 2: then when I go for it and see an incredible

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Speaker 2: increase with your portfolio, the logical extent of the argument

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Speaker 2: is to put all your eggs in that basket.

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Speaker 1: That's what if you that's what you would do. Yeah,

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Speaker 1: if you're a firm believer in like this is what

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Speaker 1: makes sense, then you go all the way. I agree,

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Speaker 1: but not many people will take their their logic, their

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Speaker 1: belief that single stock investing is a good thing to

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Speaker 1: that extent because they're hedging their bets. There you go,

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Speaker 1: all right, But another pro another argument in favor of

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Speaker 1: the whole investment trying to do. We're not trying to

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Speaker 1: tear it down yet. Well, is that it only makes

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Speaker 1: sense when you hold onto this stock, these companies over

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Speaker 1: the long term. We are fans of long term investing.

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Speaker 2: I feel like we can unequivocally say we one hundred percent.

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Speaker 1: Agree with this. Yeah. Yeah. If you're trying to take

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Speaker 1: advantage of short term market swings, well yeah, you're venturing

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Speaker 1: into trader or even like speculator territory. You're hoping that

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Speaker 1: the dice roll your way in the short term, and

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Speaker 1: that's dangerous water that you're waiting into. Right. You just

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Speaker 1: mentioned Vegas, man, it's truly vegas like to think that

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Speaker 1: you're going to make money on a stock in the

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Speaker 1: short term, in the next week, month, or even year

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Speaker 1: or two. And so yeah. Making sure that your holding

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Speaker 1: period is measured in years or decades instead of days

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Speaker 1: and months is it's just crucial when we're talking about

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Speaker 1: single stocks or when we're talking about broader index funds,

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Speaker 1: and those short term gambles can create tax issues too. So, yeah,

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Speaker 1: if you are buying and selling on the rag, not

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Speaker 1: only are you creating unnecessary risk, but you're creating potential

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Speaker 1: tax headaches too.

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Speaker 2: Yeah, you're creating those short term capital gains where the

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Speaker 2: earnings that you're going to see are going to be

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Speaker 2: taxed at your ordinary income rate as opposed to the

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Speaker 2: favorable long term capital gains. And if you're comparing between

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Speaker 2: the two, that's the one that we want to see

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Speaker 2: you have to pay, although hopefully you know, most of

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Speaker 2: your money is already in tax deferred accounts anyway, and

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Speaker 2: so you're not necessarily paying that long term capital gains.

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Speaker 2: And you know, like one of the more stringent arguments

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Speaker 2: for single stock investing is that you're missing out just

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Speaker 2: on the massive upside potential that comes with owning a

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Speaker 2: few companies that could become outliers, producing you know, those

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Speaker 2: massive returns for you years on end, outpacing the rest

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Speaker 2: of the ho hum market. And so if you avoid

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Speaker 2: doing this, if you go with index investing, will you

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Speaker 2: be missing out on the potential for one stock going

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Speaker 2: to the moon. Yeah, absolutely, you'll definitely be giving that up.

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Speaker 2: But you're also foregoing the ability to get crushed by

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Speaker 2: owning the wrong single stocks, right, So, to have your

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Speaker 2: investment cut in half or or even go to zero.

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Speaker 2: That's what we're trying to avoid here. There is inherent

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Speaker 2: risk involved when investing in individual stocks, just like there's

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Speaker 2: risk involved with any investment, but we don't think that

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Speaker 2: that is a risk that is worth it. There certainly

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Speaker 2: are some pros to some advantages to single stock investing,

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Speaker 2: but we think that the cons outweigh them, and we'll

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Speaker 2: actually get some more of some of those downsides those

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Speaker 2: cons to single stock investing right after this break, all.

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Speaker 1: Right, Matt, Before the break, we were trying to be charitable,

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Speaker 1: trying to give some of the strongest arguments for investing

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Speaker 1: in single stocks. And I think some people have done really,

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Speaker 1: really well investing in just a handful of companies and

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Speaker 1: seeing those stocks outperform the market. They've been able to

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Speaker 1: their net worth faster than the rest of us who

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Speaker 1: are just in tragically in index funds.

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Speaker 2: Right, But which sounds ridiculous to even say aloud, Yes, like, yeah,

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Speaker 2: that's kind of what some folks think.

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Speaker 1: Some well, and some folks have actually been able to

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Speaker 1: pull it off, but it is really, really difficult. And

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Speaker 1: we will talk about why we are so averse to

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Speaker 1: single stock investing and yeah, so why should people avoid it? Well,

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Speaker 1: the easiest reason is that most stock pickers are losers.

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Speaker 1: And I don't mean that in the sense that they

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Speaker 1: don't have any friends. Like, it's not that they're not cool.

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Speaker 1: They probably are. They're probably decent human beings. But what

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Speaker 1: I mean is that they regularly underperform the broader index

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Speaker 1: of stocks. And we're typically referring to the S and

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Speaker 1: P five hundred here, and the truth is it's not

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Speaker 1: even close. You know, more than eighty five percent of

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Speaker 1: professional stock pickers actually had returns that were below average

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Speaker 1: in twenty twenty one. So we're talking about professionals. This

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Speaker 1: is their day job, and they screwed up in a

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Speaker 1: massive way. They performed. So what makes most of us

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Speaker 1: out here, who have other things going on in our

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Speaker 1: lives think that, you know, we can actually do better

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Speaker 1: than those people who don't do very well?

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Speaker 2: Yeah, when is fifteen percent ever a passing grade?

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Speaker 1: Right? Well, it reminds me of like the dumb and

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Speaker 1: dumber line. So you're saying there's a chance, you know,

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Speaker 1: it's like, yeah, what there is about one in a million.

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Speaker 1: It's pretty slim though, Yeah, exactly so. And then someone

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Speaker 1: might retort and they might say, well, that's just one year, right,

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Speaker 1: that's just last year, and they're right, I'm cherry picking

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Speaker 1: a year. But let's expand our horizons a little bit.

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Speaker 1: Stock pickers have actually underperformed the broad stock market in

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Speaker 1: each of the past twelve years, not quite to that

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Speaker 1: extent each year, but there's certainly a pattern here, right

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Speaker 1: that even these professionals, that's what they do for a living,

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Speaker 1: they're trying to outperform the market. They're trying to invest

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Speaker 1: in a certain basket of individual stocks that they pick

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Speaker 1: that they think is going to do better than all

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Speaker 1: of them put together, and you know what, they consistently fail.

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Speaker 2: I feel like if there's a lobbyist group that represents

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Speaker 2: hedge fund managers, we might hear from.

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Speaker 1: Them the way worth there not money the bus.

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Speaker 2: But another bit of advice that's often given in the

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Speaker 2: pursuit of beating the market is to invest in what

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Speaker 2: you know and you know, like we get where folks

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Speaker 2: are coming from when they make this point, because the

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Speaker 2: argument goes investing yourself or you know, invest in your

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Speaker 2: own company, which sounds like a decent enough recommendation. You

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Speaker 2: know that, like, there aren't many better investments you can

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Speaker 2: make than to get an education or to put some

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Speaker 2: of your dollars towards building a business that will make

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Speaker 2: you money for years down the road. But should you

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Speaker 2: be investing in the single stock of your employer or

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Speaker 2: be buying bits and pieces of companies maybe that are

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Speaker 2: in your industry. On that, we've got to say no.

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Speaker 2: We think that buying your own employer stock is almost

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Speaker 2: never a good idea because it's it's far too risky

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Speaker 2: from a diversification standpoint, right, Like, you already get your

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Speaker 2: paycheck from there. If you're employed by a really large

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Speaker 2: company and maybe you live in a small to medium

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Speaker 2: sized town, there's a good chance that the success of

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Speaker 2: that company has a large impact on real estate as well,

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Speaker 2: so you're double dip in there. So don't increase your

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Speaker 2: risk even more by also investing within that company's stock.

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Speaker 2: It's it's also easy to think that you know, like

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Speaker 2: that you might see things more clearly because you work

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Speaker 2: in an industry. You know, you can read the tea leaves,

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Speaker 2: you can pick the right companies. But we feel that

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Speaker 2: the opposite is often true. We think that sometimes because

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Speaker 2: you're so close to what your judgment is clouded and

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Speaker 2: it's difficult to make a more objective decision.

430
00:19:20,280 --> 00:19:22,480
Speaker 1: Yeah, you think you know better, but in actuality, you're

431
00:19:22,480 --> 00:19:26,720
Speaker 1: missing basically all the other information because you're so hyper

432
00:19:26,760 --> 00:19:28,320
Speaker 1: focused on your own industry.

433
00:19:28,440 --> 00:19:30,280
Speaker 2: You can't see the forest right, like like you're there,

434
00:19:30,280 --> 00:19:32,000
Speaker 2: you're looking at the individual trees and you're you're not

435
00:19:32,000 --> 00:19:33,240
Speaker 2: looking at the big pictures right.

436
00:19:33,119 --> 00:19:36,080
Speaker 1: And you will, in all likelihood make a bad decision.

437
00:19:36,240 --> 00:19:40,399
Speaker 1: You'll invest improperly because yeah, you're so focused on that

438
00:19:40,440 --> 00:19:42,760
Speaker 1: one industry that you work in. Let's let's mention just

439
00:19:42,840 --> 00:19:45,320
Speaker 1: another argument that is used sometimes is well, you know,

440
00:19:45,400 --> 00:19:47,600
Speaker 1: it's not a big deal to just maybe in your

441
00:19:47,640 --> 00:19:50,439
Speaker 1: tax refund in a few stocks that you like. And

442
00:19:51,000 --> 00:19:53,240
Speaker 1: you know, this seems like decent advice on its face

443
00:19:53,280 --> 00:19:56,239
Speaker 1: because you're keeping your exposure in check, which is kind

444
00:19:56,280 --> 00:19:58,000
Speaker 1: of what we talked about earlier with keeping it small.

445
00:19:58,320 --> 00:20:01,280
Speaker 1: You're not overdoing it right, taking you know, a few

446
00:20:01,359 --> 00:20:05,159
Speaker 1: hundred dollars, maybe even two thousand dollars and you're sticking

447
00:20:05,160 --> 00:20:07,520
Speaker 1: that money in individual stocks when you get it in

448
00:20:07,560 --> 00:20:10,840
Speaker 1: one lump. Tom. But here's the thing. Money is fungible,

449
00:20:10,920 --> 00:20:13,679
Speaker 1: so we don't really care where you get your investment

450
00:20:13,720 --> 00:20:16,040
Speaker 1: dollars stocks exactly. You know, whether you're taking money from

451
00:20:16,040 --> 00:20:18,760
Speaker 1: your tax refund or your dollar cost averaging in your

452
00:20:18,760 --> 00:20:21,120
Speaker 1: four roll one K every two weeks with every single

453
00:20:21,160 --> 00:20:24,719
Speaker 1: paycheck you get, single stock investing is still perilous. And

454
00:20:25,040 --> 00:20:27,000
Speaker 1: you know, it's not a question of where you get

455
00:20:27,000 --> 00:20:29,800
Speaker 1: the dollars to invest in those single stocks, but whether

456
00:20:29,840 --> 00:20:32,320
Speaker 1: it makes any sense to begin with, and of course,

457
00:20:32,359 --> 00:20:33,919
Speaker 1: as you know at this point in the show, we

458
00:20:33,960 --> 00:20:34,560
Speaker 1: don't think it does.

459
00:20:34,880 --> 00:20:38,400
Speaker 2: Yeah, and I'll mention too, I mean, compared to spending

460
00:20:38,400 --> 00:20:41,280
Speaker 2: that money, Like if the only alternative to that.

461
00:20:41,200 --> 00:20:43,400
Speaker 1: Tax refund is you just blowing because that's what you're

462
00:20:43,480 --> 00:20:45,520
Speaker 1: used to doing ski your single stocks. Matt and Joel like,

463
00:20:45,600 --> 00:20:47,920
Speaker 1: it's that that bold of my di dichotomy.

464
00:20:48,000 --> 00:20:50,000
Speaker 2: Although you know, in years past we would have said

465
00:20:50,000 --> 00:20:52,320
Speaker 2: that about buying cars, and right now we happen to

466
00:20:52,359 --> 00:20:55,520
Speaker 2: be in an environment where used cars are selling more

467
00:20:55,560 --> 00:20:57,680
Speaker 2: for what they used to. But you definitely can't count

468
00:20:57,720 --> 00:20:59,800
Speaker 2: on that moving forward, but compared to the single stock

469
00:20:59,800 --> 00:21:02,600
Speaker 2: and if spending is your only other alternative, then yes,

470
00:21:02,760 --> 00:21:05,520
Speaker 2: we would say. I mean, investing in anything pretty much

471
00:21:05,520 --> 00:21:07,640
Speaker 2: is always going to win if you're looking to grow

472
00:21:07,680 --> 00:21:09,879
Speaker 2: your wealth down the road, and so if that's the alternative,

473
00:21:10,000 --> 00:21:12,240
Speaker 2: if those your two options, then we would have to

474
00:21:12,480 --> 00:21:14,520
Speaker 2: side on the side of yeah, go ahead and invest

475
00:21:14,600 --> 00:21:14,840
Speaker 2: that money.

476
00:21:14,920 --> 00:21:16,879
Speaker 1: Can I just say too real quick that it's not

477
00:21:17,000 --> 00:21:20,240
Speaker 1: that we like really individual stock investing in any way,

478
00:21:20,280 --> 00:21:22,879
Speaker 1: form or fashion. But not all stocks are created equal.

479
00:21:23,080 --> 00:21:25,520
Speaker 1: So if you're like taking a gamble on a penny stock,

480
00:21:25,720 --> 00:21:28,040
Speaker 1: that is very different than putting your money with a

481
00:21:28,080 --> 00:21:32,320
Speaker 1: single company that has proven to be successful over many

482
00:21:32,400 --> 00:21:34,360
Speaker 1: years x right, company like Apple or Google. And I'm

483
00:21:34,359 --> 00:21:37,920
Speaker 1: not saying that those stocks are ployees to rise even more,

484
00:21:38,000 --> 00:21:41,040
Speaker 1: or that there aren't competitors coming in to nipping at

485
00:21:41,080 --> 00:21:43,640
Speaker 1: their heels trying to take their place. But these companies

486
00:21:43,680 --> 00:21:46,480
Speaker 1: at least have a variety of streams of income and

487
00:21:46,680 --> 00:21:49,720
Speaker 1: they've proven successful over the long term. Not all single

488
00:21:49,720 --> 00:21:52,240
Speaker 1: stocks are created equal. That still isn't a good enough

489
00:21:52,280 --> 00:21:54,240
Speaker 1: reason to say that it makes sense.

490
00:21:54,600 --> 00:21:57,720
Speaker 2: I feel that we're like layering caveats upon caveats because

491
00:21:58,320 --> 00:22:00,280
Speaker 2: because It also kind of depends on the type of

492
00:22:00,280 --> 00:22:02,000
Speaker 2: spending that you're doing, right, because if you're going to

493
00:22:02,320 --> 00:22:06,040
Speaker 2: drop some money on what's this like roach for ten,

494
00:22:06,240 --> 00:22:08,840
Speaker 2: you know, like a nice Belgian stellar beer, you'll be

495
00:22:08,840 --> 00:22:11,040
Speaker 2: all right, Yeah it's not super top of the line,

496
00:22:11,040 --> 00:22:13,320
Speaker 2: but it's a solid beer. We just want to keep

497
00:22:13,359 --> 00:22:16,119
Speaker 2: you from that mindless spending. It's just that there's a

498
00:22:16,160 --> 00:22:19,280
Speaker 2: difference between you putting money towards something that you truly

499
00:22:19,400 --> 00:22:23,280
Speaker 2: value versus spending willy nilly. But let's talk about fundamentals

500
00:22:23,320 --> 00:22:25,640
Speaker 2: as well, because typically, you know, you might ask yourself,

501
00:22:26,160 --> 00:22:28,000
Speaker 2: is this a good company? Is this a good company

502
00:22:28,040 --> 00:22:29,880
Speaker 2: that I'm going to be investing with? Because you better

503
00:22:29,920 --> 00:22:32,680
Speaker 2: hope so if you're banking on making some money from

504
00:22:32,720 --> 00:22:35,120
Speaker 2: this investment. But this is a pretty tough question because

505
00:22:35,119 --> 00:22:38,480
Speaker 2: it's not just about whether the company is a good

506
00:22:38,480 --> 00:22:40,480
Speaker 2: one or not. It's about whether the price that you're

507
00:22:40,480 --> 00:22:43,240
Speaker 2: paying for that company makes sense. I could list off

508
00:22:43,280 --> 00:22:45,320
Speaker 2: a bunch of companies right now, like I'm thinking about

509
00:22:45,680 --> 00:22:49,040
Speaker 2: like Netflix, Peloton, Facebook, These are a few companies that

510
00:22:49,080 --> 00:22:51,200
Speaker 2: have revolutionized their spaces.

511
00:22:51,280 --> 00:22:54,920
Speaker 1: You know historically that anybody would say those are good

512
00:22:54,920 --> 00:22:56,680
Speaker 1: companies matter? Sure, Yeah, yeah, like the.

513
00:22:56,600 --> 00:22:59,639
Speaker 2: Ability to stream virtually any movie at home, or to

514
00:23:00,040 --> 00:23:01,680
Speaker 2: work out at home, or you know, talk with.

515
00:23:01,640 --> 00:23:04,399
Speaker 1: Your high school buddies who you've never talked to, you

516
00:23:04,440 --> 00:23:06,120
Speaker 1: haven't talked to in years, in nearly like fifty years

517
00:23:06,119 --> 00:23:09,720
Speaker 1: because they had another kiddo. They've like forever altered the

518
00:23:09,720 --> 00:23:12,560
Speaker 1: spaces that they inhabit. The end result of what they

519
00:23:12,600 --> 00:23:15,840
Speaker 1: have created is incredible. But that being said, how are

520
00:23:16,000 --> 00:23:19,360
Speaker 1: their respective stock prices doing? You might ask pretty rough

521
00:23:19,480 --> 00:23:23,600
Speaker 1: right now? They're truly bad. What the company is creating

522
00:23:23,720 --> 00:23:26,639
Speaker 1: it is important, but so are their financials, and so

523
00:23:26,680 --> 00:23:28,720
Speaker 1: it's important to keep in mind that the ever changing

524
00:23:28,920 --> 00:23:32,560
Speaker 1: competitive landscape, it's something else that you'll have to consistently

525
00:23:32,600 --> 00:23:36,679
Speaker 1: size up if you want to start investing in individual companies. Yeah, man,

526
00:23:36,720 --> 00:23:38,320
Speaker 1: I think I think the point that you just made

527
00:23:38,320 --> 00:23:41,120
Speaker 1: goes to kind of show that what Benjamin Graham, who's

528
00:23:41,119 --> 00:23:43,200
Speaker 1: like one of considered one of the classic value investors

529
00:23:43,200 --> 00:23:46,679
Speaker 1: of all time, he talked about monkeys throwing darts at

530
00:23:46,680 --> 00:23:50,600
Speaker 1: a dartboard, they'd have more success than professional trainers. And

531
00:23:50,640 --> 00:23:52,480
Speaker 1: it's one of those things where like, yeah, you look

532
00:23:52,480 --> 00:23:54,920
Speaker 1: at these companies, Netflix, Peloton, and Facebook are the ones

533
00:23:54,920 --> 00:23:58,400
Speaker 1: you mentioned they're all having just incredible success in their arenas,

534
00:23:58,440 --> 00:24:01,560
Speaker 1: but their stock prices are still suffering. And so it's

535
00:24:01,640 --> 00:24:05,160
Speaker 1: not just about picking a company that has done something

536
00:24:05,200 --> 00:24:07,280
Speaker 1: great or is doing something great. There are so many

537
00:24:07,359 --> 00:24:08,880
Speaker 1: other variables involved too.

538
00:24:09,119 --> 00:24:10,880
Speaker 2: Yeah, And I think one of the natural outcomes too,

539
00:24:11,040 --> 00:24:13,639
Speaker 2: of doing that research is you know, you're looking at

540
00:24:13,680 --> 00:24:16,480
Speaker 2: a specific company, and then you think, well, well, what

541
00:24:16,480 --> 00:24:18,199
Speaker 2: about their competitors? So you zoom out a little bit

542
00:24:18,200 --> 00:24:19,720
Speaker 2: and you start looking at some of the other companies

543
00:24:19,880 --> 00:24:21,160
Speaker 2: that they're in competition with, and.

544
00:24:21,080 --> 00:24:22,480
Speaker 1: Then you zoom out you're in the weeds.

545
00:24:22,520 --> 00:24:23,879
Speaker 2: Yeah, you zoom out a little bit more, and then

546
00:24:23,920 --> 00:24:27,320
Speaker 2: you're researching an entire industry, an entire sector. That's not

547
00:24:27,359 --> 00:24:28,800
Speaker 2: a path that we want you to go down. That's

548
00:24:28,800 --> 00:24:30,879
Speaker 2: not how we want you to spend your research time,

549
00:24:31,080 --> 00:24:34,840
Speaker 2: as opposed to spending your time and energy towards making

550
00:24:34,880 --> 00:24:38,320
Speaker 2: sure that you've got some basic fundamental principles down pat

551
00:24:38,359 --> 00:24:41,119
Speaker 2: when it comes to just your general personal finances.

552
00:24:41,200 --> 00:24:43,800
Speaker 1: Yeah, I agree. All Right's talk about just another issue

553
00:24:44,160 --> 00:24:47,119
Speaker 1: that comes to bear when we're talking about individual stock investing,

554
00:24:47,160 --> 00:24:50,160
Speaker 1: and it might be the most severe issue that investing

555
00:24:50,160 --> 00:24:54,720
Speaker 1: in individual stocks faces, and it's timing, because let's even

556
00:24:54,800 --> 00:24:57,080
Speaker 1: just assume that you found a great company where the

557
00:24:57,080 --> 00:25:00,439
Speaker 1: fundamentals appear to be super strong, They're in a sector

558
00:25:00,840 --> 00:25:04,800
Speaker 1: that is healthy, is going to be booming for decades expanding. Yeah,

559
00:25:04,840 --> 00:25:07,040
Speaker 1: and they look to be undervalued and you think they've

560
00:25:07,040 --> 00:25:09,040
Speaker 1: got room to grow. Well, there are still a couple

561
00:25:09,080 --> 00:25:12,159
Speaker 1: of key questions that remain, like when to buy and

562
00:25:12,200 --> 00:25:15,399
Speaker 1: then when to sell right, and so yeah, let's take

563
00:25:15,400 --> 00:25:18,760
Speaker 1: for example, Matt Tesla, because that has been a stock

564
00:25:18,840 --> 00:25:21,800
Speaker 1: that has done a lot of individual investors well in

565
00:25:21,840 --> 00:25:22,480
Speaker 1: recent years.

566
00:25:22,520 --> 00:25:25,760
Speaker 2: It's a darling of mini's individual stock investors' portfolio.

567
00:25:25,840 --> 00:25:29,520
Speaker 1: Yes, so back in twenty fifteen, in hindsight, that would

568
00:25:29,560 --> 00:25:31,600
Speaker 1: have been a killer time to have purchased some of

569
00:25:31,600 --> 00:25:32,960
Speaker 1: that stock. Of course, if we could all go back

570
00:25:32,960 --> 00:25:35,439
Speaker 1: in time, we all would. But by the middle of

571
00:25:35,480 --> 00:25:38,359
Speaker 1: twenty seventeen you would have been up around seventy five percent.

572
00:25:38,680 --> 00:25:41,240
Speaker 1: The S and P would have only returned twenty five percent.

573
00:25:41,400 --> 00:25:43,680
Speaker 1: And so you're like, I'm smart, i know what I'm doing,

574
00:25:43,760 --> 00:25:46,320
Speaker 1: I'm the genius. But then would you have been able

575
00:25:46,359 --> 00:25:49,399
Speaker 1: to hang on while Tesla stock plummeted in twenty nineteen.

576
00:25:49,640 --> 00:25:51,360
Speaker 1: By the end of that May, they were sitting at

577
00:25:51,440 --> 00:25:54,359
Speaker 1: a negative fifteen percent return based on where you would

578
00:25:54,359 --> 00:25:55,560
Speaker 1: have bought just four and a half years ago. So

579
00:25:55,600 --> 00:25:58,240
Speaker 1: here like, I'm underwater now on this stock. I thought

580
00:25:58,280 --> 00:26:00,720
Speaker 1: this company was the but in the future they were

581
00:26:00,760 --> 00:26:02,680
Speaker 1: going to make these electric cars that change the world.

582
00:26:03,080 --> 00:26:06,639
Speaker 1: And in four and a half years, I'm at a loss.

583
00:26:07,040 --> 00:26:10,200
Speaker 1: Literally sitting in my portfolio. It feels crappy. And so yeah,

584
00:26:10,240 --> 00:26:11,920
Speaker 1: I'm not sure if I would have been able to

585
00:26:11,960 --> 00:26:13,600
Speaker 1: have the stomach for that, and I'm sure a lot

586
00:26:13,640 --> 00:26:15,800
Speaker 1: of other investors did not have the stomach and got

587
00:26:15,800 --> 00:26:17,879
Speaker 1: out at the wrong time. And you know, at the

588
00:26:17,880 --> 00:26:19,480
Speaker 1: same time, the S and P would have been up

589
00:26:19,600 --> 00:26:23,240
Speaker 1: forty percent, just compounding maybe your negative emotions and so

590
00:26:23,359 --> 00:26:26,080
Speaker 1: picking a winner and then getting the timing right is

591
00:26:26,119 --> 00:26:29,000
Speaker 1: what makes this such a difficult proposition, especially kind of

592
00:26:29,000 --> 00:26:31,040
Speaker 1: like you alluded to, Matt, people have families, they have

593
00:26:31,119 --> 00:26:32,879
Speaker 1: day jobs, they have other things going on their lives

594
00:26:32,920 --> 00:26:36,080
Speaker 1: that they need to focus on, and so it can

595
00:26:36,119 --> 00:26:38,879
Speaker 1: be hard to ride that roller coaster of individual stock

596
00:26:39,000 --> 00:26:41,600
Speaker 1: up and downs. It's hard to retain that belief in

597
00:26:41,640 --> 00:26:44,679
Speaker 1: a company when the stock is plummeting, and you know,

598
00:26:44,840 --> 00:26:48,040
Speaker 1: the broader basket of stocks is doing well. How do

599
00:26:48,080 --> 00:26:51,119
Speaker 1: you maintain that conviction and stay the course? And then

600
00:26:51,160 --> 00:26:53,200
Speaker 1: how do you know when to sell when you're on top.

601
00:26:53,520 --> 00:26:56,439
Speaker 1: That's a really difficult thing to do, and most people

602
00:26:56,680 --> 00:26:59,120
Speaker 1: haven't figured that out. They are kind of like those monkeys,

603
00:26:59,200 --> 00:27:02,000
Speaker 1: just really throwing darts, just hoping to do better than

604
00:27:02,200 --> 00:27:05,439
Speaker 1: the average. Yeah, and what we're talking about here is volatility. Right.

605
00:27:05,480 --> 00:27:07,640
Speaker 2: It's tough to see one of your favorite companies see

606
00:27:07,640 --> 00:27:10,679
Speaker 2: a decline in stock price of like fifty or seventy percent,

607
00:27:11,240 --> 00:27:13,200
Speaker 2: And the pandemic like that just gave us a clear

608
00:27:13,240 --> 00:27:16,720
Speaker 2: picture too, of winners becoming losers pretty quickly. You're going

609
00:27:16,800 --> 00:27:19,880
Speaker 2: to see these massive swings in price with individual stocks

610
00:27:20,040 --> 00:27:23,920
Speaker 2: as opposed to larger indexes gains and losses. They get

611
00:27:23,960 --> 00:27:27,000
Speaker 2: racked up more quickly, and the swings can feel either

612
00:27:27,040 --> 00:27:30,280
Speaker 2: exhilarating or just like a total gut punch kick to

613
00:27:30,320 --> 00:27:34,399
Speaker 2: the pants. So, for instance, I mentioned the pandemic for

614
00:27:34,480 --> 00:27:37,800
Speaker 2: some individual companies, the pandemic was great for business, right

615
00:27:37,880 --> 00:27:40,760
Speaker 2: if you bought Zoom, Talle, Doot, Peloton, these are all

616
00:27:40,800 --> 00:27:43,200
Speaker 2: companies were back in early twenty twenty. If you would

617
00:27:43,240 --> 00:27:44,919
Speaker 2: have purchased some of them, you would have seen some

618
00:27:44,960 --> 00:27:46,240
Speaker 2: incredible returns with the.

619
00:27:46,240 --> 00:27:48,359
Speaker 1: Smart money right there, Yeah, for a little bit.

620
00:27:48,440 --> 00:27:50,640
Speaker 2: You know, just for a while, because those stocks are

621
00:27:50,680 --> 00:27:53,600
Speaker 2: all now far below where they were two years ago.

622
00:27:53,800 --> 00:27:55,960
Speaker 2: The same thing as true with companies like Roku and

623
00:27:56,080 --> 00:27:58,560
Speaker 2: Zillo as well. Does know, Does that mean that those

624
00:27:58,600 --> 00:28:01,160
Speaker 2: companies are bad, Not at all, But it still doesn't

625
00:28:01,240 --> 00:28:03,800
Speaker 2: mean that owning their stocks outside of an index fund

626
00:28:03,840 --> 00:28:07,280
Speaker 2: that it makes any sense. Buying these individual stocks like

627
00:28:07,280 --> 00:28:10,119
Speaker 2: they offer the potential for greater gains, but it also

628
00:28:10,320 --> 00:28:14,000
Speaker 2: opens you up to just like the psychological pitfalls that

629
00:28:14,240 --> 00:28:17,040
Speaker 2: don't apply to nearly the same extent when you own

630
00:28:17,520 --> 00:28:20,800
Speaker 2: most of or even all of the stocks in index funds,

631
00:28:20,840 --> 00:28:22,200
Speaker 2: right and so we're talking about the S and P

632
00:28:22,280 --> 00:28:25,040
Speaker 2: five hundred index fund or the different total stock market

633
00:28:25,080 --> 00:28:26,080
Speaker 2: index funds that are out there.

634
00:28:26,160 --> 00:28:29,120
Speaker 1: Yeah. And so when the predictions were being made Matt

635
00:28:29,160 --> 00:28:31,240
Speaker 1: in the heat of the beginning of the pandemic, it

636
00:28:31,320 --> 00:28:33,719
Speaker 1: was like, Zoom is going to change the way we

637
00:28:33,760 --> 00:28:36,200
Speaker 1: work for the rest of our lives. You know, Peloton,

638
00:28:36,280 --> 00:28:38,720
Speaker 1: nobody's going back to the gym. Peloton is going to

639
00:28:38,920 --> 00:28:41,200
Speaker 1: take off like a rocket ship. And like a lot

640
00:28:41,200 --> 00:28:43,720
Speaker 1: of these companies like they did, and their stock prices

641
00:28:43,840 --> 00:28:46,480
Speaker 1: went up accordingly. But now they've come back down to

642
00:28:46,520 --> 00:28:48,880
Speaker 1: earth and many of these stock prices are actually below

643
00:28:48,960 --> 00:28:52,840
Speaker 1: pre pandemic levels, even though these companies did great business

644
00:28:53,120 --> 00:28:55,280
Speaker 1: during the pandemic. And so it's one of those things

645
00:28:55,320 --> 00:28:58,720
Speaker 1: where would you have sold at the top you're expecting,

646
00:28:58,960 --> 00:29:01,560
Speaker 1: especially when the stock prices up one hundred and fifty

647
00:29:01,600 --> 00:29:04,480
Speaker 1: percent over a year or something like that. You know what,

648
00:29:04,680 --> 00:29:06,560
Speaker 1: I think this gravy train's going to keep going, but

649
00:29:06,640 --> 00:29:09,600
Speaker 1: it can change almost overnight. And so that timing piece,

650
00:29:09,600 --> 00:29:12,400
Speaker 1: that volatility piece, is so hard to stomach as an

651
00:29:12,440 --> 00:29:14,760
Speaker 1: individual investor. How do you know when to do what?

652
00:29:15,320 --> 00:29:17,320
Speaker 1: And then, you know, the other part of the problem

653
00:29:17,400 --> 00:29:20,400
Speaker 1: with individual stock investing is the luck piece, because you

654
00:29:20,400 --> 00:29:23,920
Speaker 1: can fool yourself into thinking that you're a great stock picker.

655
00:29:24,040 --> 00:29:26,800
Speaker 1: You know those long time Tesla investors, they do look

656
00:29:26,840 --> 00:29:29,560
Speaker 1: like geniuses right now. And it makes me think about

657
00:29:29,600 --> 00:29:32,280
Speaker 1: our friend Carl, who has a lot of his network

658
00:29:32,320 --> 00:29:34,680
Speaker 1: tied up in that company. We had him on the

659
00:29:34,680 --> 00:29:37,720
Speaker 1: podcast back in episode for twenty one. But even he

660
00:29:37,720 --> 00:29:40,040
Speaker 1: he says, don't do like I did. And you know,

661
00:29:40,240 --> 00:29:42,560
Speaker 1: the route of single stock investing, even though it's been

662
00:29:42,600 --> 00:29:44,959
Speaker 1: good to me, he would say, he doesn't recommend it,

663
00:29:45,000 --> 00:29:48,400
Speaker 1: And you know, the question really comes down to what's

664
00:29:48,560 --> 00:29:52,840
Speaker 1: your measure for judging success? And selecting individual stocks is

665
00:29:53,080 --> 00:29:56,280
Speaker 1: kind of like playing a game where it's basically impossible

666
00:29:56,280 --> 00:29:59,239
Speaker 1: to determine whether you're good or just lucky. It's kind

667
00:29:59,280 --> 00:30:00,840
Speaker 1: of like risk, where you think you're good at it,

668
00:30:00,840 --> 00:30:03,320
Speaker 1: but really you're just rolling dice like so much if

669
00:30:03,360 --> 00:30:05,160
Speaker 1: it comes down to the luck of the role. I mean,

670
00:30:05,240 --> 00:30:07,960
Speaker 1: obviously there's a little strategy involved, but it can feel

671
00:30:08,280 --> 00:30:10,560
Speaker 1: kind of like that where there's a good mix of both.

672
00:30:10,600 --> 00:30:13,520
Speaker 1: And so, yeah, when stock prices shift by twenty percent

673
00:30:13,640 --> 00:30:17,200
Speaker 1: literally overnight, it certainly feels more like luck than skill.

674
00:30:17,480 --> 00:30:20,160
Speaker 1: And I just appreciate Carl's mentality even as someone who

675
00:30:20,160 --> 00:30:22,640
Speaker 1: has picked well, he's still got that conviction that it's

676
00:30:22,840 --> 00:30:24,840
Speaker 1: bad for most people to do. Definitely.

677
00:30:24,920 --> 00:30:26,880
Speaker 2: Yeah, what I appreciate about him is that he has

678
00:30:26,920 --> 00:30:29,360
Speaker 2: that self awareness to know, I'm not necessarily a genius.

679
00:30:29,400 --> 00:30:31,400
Speaker 2: I just really believe in this company, this technology, and

680
00:30:31,520 --> 00:30:32,120
Speaker 2: where they're going.

681
00:30:32,120 --> 00:30:34,239
Speaker 1: He'd even admit that he's like a little hardheaded and

682
00:30:34,360 --> 00:30:35,920
Speaker 1: kind of just like way too into some of those

683
00:30:35,960 --> 00:30:37,400
Speaker 1: industries and so he's.

684
00:30:37,240 --> 00:30:40,160
Speaker 2: Like he realizes his shortcomings, yeah, and knows that his

685
00:30:40,840 --> 00:30:42,960
Speaker 2: portfolio is exposed to more risk because of that.

686
00:30:43,000 --> 00:30:45,360
Speaker 1: Right, and he knew what he was getting into. And again,

687
00:30:45,400 --> 00:30:46,680
Speaker 1: it's kind of one of those things where it's like

688
00:30:46,840 --> 00:30:48,360
Speaker 1: he's willing to put some of his money at risk,

689
00:30:48,400 --> 00:30:50,440
Speaker 1: and you know what, He's got plenty of wealth and

690
00:30:50,520 --> 00:30:53,440
Speaker 1: just index funds to cover the rest of his life.

691
00:30:53,440 --> 00:30:55,440
Speaker 1: And so this is really just kind of something that

692
00:30:55,480 --> 00:30:57,120
Speaker 1: he does. It's like a passion, it's a hobby, it's

693
00:30:57,160 --> 00:30:59,600
Speaker 1: an interest, and you know that's a different reason to

694
00:30:59,640 --> 00:31:00,600
Speaker 1: do it totally. Yeah.

695
00:31:00,600 --> 00:31:02,440
Speaker 2: I think one of the worst things that could possibly

696
00:31:02,440 --> 00:31:05,080
Speaker 2: happen is that you do get lucky initially, because then

697
00:31:05,120 --> 00:31:07,400
Speaker 2: you think that you are an investing genius and then

698
00:31:07,440 --> 00:31:08,960
Speaker 2: you can potentially follow yourself there.

699
00:31:09,080 --> 00:31:09,560
Speaker 1: Yeah.

700
00:31:09,560 --> 00:31:11,800
Speaker 2: Well, like what if you then end up pouring more

701
00:31:11,800 --> 00:31:13,880
Speaker 2: money in there after that? Right, Like you end up

702
00:31:14,200 --> 00:31:16,920
Speaker 2: following those investments with even larger sums of money. That

703
00:31:16,960 --> 00:31:20,800
Speaker 2: could lead to an unbalanced portfolio allocation in addition to

704
00:31:20,960 --> 00:31:23,880
Speaker 2: a root awakening when it corrects. And so if you're

705
00:31:23,960 --> 00:31:25,920
Speaker 2: going to become a single stock investor, you got to

706
00:31:25,920 --> 00:31:29,200
Speaker 2: make sure you keep accurate records on how you're doing,

707
00:31:29,200 --> 00:31:31,480
Speaker 2: so you don't fool yourself into thinking that you're a

708
00:31:31,520 --> 00:31:34,160
Speaker 2: better investor than you actually are. In this way, I

709
00:31:34,200 --> 00:31:35,959
Speaker 2: think that it could almost even be better for you

710
00:31:36,400 --> 00:31:39,280
Speaker 2: if you go all in on a company that just

711
00:31:39,400 --> 00:31:42,200
Speaker 2: ends up just completely bottoming out, because then at least

712
00:31:42,280 --> 00:31:44,120
Speaker 2: there's no way that you can fool yourself, right.

713
00:31:44,360 --> 00:31:47,000
Speaker 1: It's like a flood as opposed to just a trickle.

714
00:31:47,160 --> 00:31:49,280
Speaker 2: If you're investing in a bunch of different single stocks

715
00:31:49,880 --> 00:31:53,240
Speaker 2: over time, maybe you're not doing so good, right, but

716
00:31:53,360 --> 00:31:56,200
Speaker 2: the occasional, you know, maybe you hit a like a double,

717
00:31:56,320 --> 00:31:58,800
Speaker 2: like a base hit, where you're like, oh, okay, like

718
00:31:58,840 --> 00:32:00,640
Speaker 2: that one did pretty good, and it's like just enough

719
00:32:00,640 --> 00:32:02,680
Speaker 2: to kind of keep you interested. Maybe you don't keep

720
00:32:02,720 --> 00:32:05,080
Speaker 2: great records, and yeah, you're able to kind of convince

721
00:32:05,120 --> 00:32:07,480
Speaker 2: yourself that, you know what, I'm actually doing pretty good here.

722
00:32:07,920 --> 00:32:10,600
Speaker 2: Versus if something completely tanks and let's just say you

723
00:32:10,600 --> 00:32:12,200
Speaker 2: go all in on a single stock and it just

724
00:32:12,240 --> 00:32:16,000
Speaker 2: wipes you out, You've got to admit at that point that, wow,

725
00:32:16,400 --> 00:32:17,320
Speaker 2: I can't keep doing this.

726
00:32:17,400 --> 00:32:19,840
Speaker 1: Like sometimes just one good hard lesson, yes, to be

727
00:32:19,920 --> 00:32:21,959
Speaker 1: all you need to kind of correct your behavior exactly.

728
00:32:22,000 --> 00:32:23,800
Speaker 2: And so I guess what we're pointing out is the

729
00:32:23,840 --> 00:32:27,240
Speaker 2: potential danger for you to have just a small measure

730
00:32:27,320 --> 00:32:30,560
Speaker 2: of success even if overall it's not doing as well

731
00:32:30,600 --> 00:32:31,600
Speaker 2: as the something like the S.

732
00:32:31,560 --> 00:32:33,960
Speaker 1: And P right, and that success can change very quickly.

733
00:32:34,520 --> 00:32:36,520
Speaker 1: But all right, Matt, we've got more that we've got

734
00:32:36,560 --> 00:32:38,760
Speaker 1: to get to. Lets talk about some takeaways for people

735
00:32:38,880 --> 00:32:40,800
Speaker 1: when it comes to how they should be investing. That

736
00:32:40,880 --> 00:32:44,040
Speaker 1: if we think individual stock investing is a fool's errand

737
00:32:44,040 --> 00:32:46,280
Speaker 1: it's really stupid, and that most of our listeners should

738
00:32:46,320 --> 00:32:48,800
Speaker 1: be avoiding it completely, well, then how should they be

739
00:32:48,840 --> 00:32:52,400
Speaker 1: investing instead? We'll talk about that more right after this break.

740
00:33:01,360 --> 00:33:03,520
Speaker 2: All right, we are back, and you know now that

741
00:33:03,560 --> 00:33:06,720
Speaker 2: we have, like we thoroughly covered the different reasons that

742
00:33:06,760 --> 00:33:08,760
Speaker 2: there are a lot of folks out there investing in

743
00:33:08,800 --> 00:33:11,760
Speaker 2: single stocks and why we believe that you likely shouldn't

744
00:33:11,760 --> 00:33:13,640
Speaker 2: be investing in single stocks. Let's talk about what you

745
00:33:13,640 --> 00:33:16,240
Speaker 2: should be doing with your investments. And you know what

746
00:33:16,360 --> 00:33:18,720
Speaker 2: great question to ask yourself is, like do I need

747
00:33:18,720 --> 00:33:21,640
Speaker 2: to outpace the market, Because like, I think that's the

748
00:33:21,640 --> 00:33:24,280
Speaker 2: primary goal of almost anyone out there who is investing

749
00:33:24,320 --> 00:33:26,960
Speaker 2: in single stocks, right, Like they want that better than

750
00:33:27,000 --> 00:33:30,120
Speaker 2: average return, But most of us will do just fine

751
00:33:30,240 --> 00:33:33,640
Speaker 2: building wealth. Based on the average returns on the market.

752
00:33:33,920 --> 00:33:36,080
Speaker 2: The return on the S and P five hundred last

753
00:33:36,120 --> 00:33:39,280
Speaker 2: year is almost thirty percent. Don't forget that. That's really good.

754
00:33:39,640 --> 00:33:41,640
Speaker 2: That being said, average returns are closer to something like

755
00:33:41,680 --> 00:33:43,880
Speaker 2: ten percent, but that is also really stinking good.

756
00:33:44,120 --> 00:33:46,280
Speaker 1: Most of us just don't need to swing for the fences.

757
00:33:46,640 --> 00:33:49,400
Speaker 2: The problem with single stock investing and going big is

758
00:33:49,400 --> 00:33:51,200
Speaker 2: that there's a good chance that you know of you

759
00:33:51,360 --> 00:33:53,959
Speaker 2: solidly connecting with the ball, but that it you know

760
00:33:54,040 --> 00:33:56,520
Speaker 2: then ultimately ends up just dying on the warning track

761
00:33:56,840 --> 00:33:58,560
Speaker 2: because of all the pitfalls.

762
00:33:58,200 --> 00:34:01,240
Speaker 1: That we've discussed. Look at you using a baseball analogy, specifically,

763
00:34:01,240 --> 00:34:04,120
Speaker 1: that one was for you, Joel, Who are you right now? No,

764
00:34:04,280 --> 00:34:06,720
Speaker 1: I think it's a good point. Base hits, doubles, triples,

765
00:34:06,880 --> 00:34:09,120
Speaker 1: It looks good, it looks sexy. Baseball season, they say,

766
00:34:09,280 --> 00:34:11,200
Speaker 1: At least when we were growing up, chickstick to long ball.

767
00:34:11,239 --> 00:34:13,080
Speaker 1: It was kind of the phrase that people would use,

768
00:34:13,239 --> 00:34:15,000
Speaker 1: and yeah, you hit it, you hit it heavy for

769
00:34:15,040 --> 00:34:17,239
Speaker 1: the fences. Literally. In a spring training game the other day,

770
00:34:17,320 --> 00:34:19,560
Speaker 1: the New Braves first basement hit a ball and it

771
00:34:19,600 --> 00:34:21,560
Speaker 1: looked like it was going to the fence, someone leapt

772
00:34:21,640 --> 00:34:24,560
Speaker 1: up and made an amazing catch, robed the home run,

773
00:34:24,760 --> 00:34:27,000
Speaker 1: And that, to me is what single stock investing can

774
00:34:27,040 --> 00:34:30,320
Speaker 1: feel like. It feels just like that and so and it's.

775
00:34:30,200 --> 00:34:32,720
Speaker 2: The tweet from a certain pretty you know, different CEOs

776
00:34:32,719 --> 00:34:34,680
Speaker 2: out there that keeps it from actually being a homer.

777
00:34:34,719 --> 00:34:36,520
Speaker 1: It can't I can do it. It's like, oh, we're

778
00:34:36,520 --> 00:34:38,319
Speaker 1: so close, buddy, why'd you go screwed? So Really, what

779
00:34:38,360 --> 00:34:40,040
Speaker 1: you were just talking about is goal setting, and it's

780
00:34:40,040 --> 00:34:41,920
Speaker 1: that people need to ask themselves, like, what are my

781
00:34:42,000 --> 00:34:45,680
Speaker 1: goals here? And if your goal is to try to

782
00:34:45,719 --> 00:34:47,800
Speaker 1: grow your money as quickly as possible, to try to

783
00:34:47,800 --> 00:34:50,960
Speaker 1: get rich quick, then you're going to need to probably

784
00:34:51,040 --> 00:34:54,200
Speaker 1: partake in a lot of individual stock investing. You're going

785
00:34:54,280 --> 00:34:57,440
Speaker 1: to need to take higher risks. But we talked about recently,

786
00:34:57,640 --> 00:35:00,320
Speaker 1: you know why getting wealthy and attempting to get wealthy

787
00:35:00,320 --> 00:35:02,359
Speaker 1: over the long term is so much better than trying

788
00:35:02,440 --> 00:35:04,640
Speaker 1: to get rich. And I think single stock investing, that's

789
00:35:04,680 --> 00:35:06,759
Speaker 1: something that people fall prey to is they think they

790
00:35:06,800 --> 00:35:10,600
Speaker 1: need to build up their war chest of investment dollars

791
00:35:10,760 --> 00:35:13,040
Speaker 1: more quickly than they actually need to, and those average

792
00:35:13,040 --> 00:35:15,960
Speaker 1: returns are actually going to be plenty when it comes

793
00:35:15,960 --> 00:35:19,000
Speaker 1: to building wealth over years and decades, and so yeah,

794
00:35:19,040 --> 00:35:21,200
Speaker 1: the next takeaway, the next thing you need to think

795
00:35:21,200 --> 00:35:24,760
Speaker 1: about when it comes to how you invest is diversification

796
00:35:24,840 --> 00:35:28,839
Speaker 1: and how it's the real winning strategy because total stock

797
00:35:28,840 --> 00:35:31,160
Speaker 1: market funds or the S and P five hundred index funds,

798
00:35:31,360 --> 00:35:34,480
Speaker 1: those are what we typically recommend. Target date funds are

799
00:35:34,520 --> 00:35:37,719
Speaker 1: another great option for lots of folks. But each of

800
00:35:37,800 --> 00:35:40,680
Speaker 1: those funds is going to buy you a massive basket

801
00:35:40,800 --> 00:35:44,160
Speaker 1: of different companies. Do you own the loser companies? Yes,

802
00:35:44,239 --> 00:35:46,960
Speaker 1: yes you do, but you also own the winners. And

803
00:35:47,000 --> 00:35:51,040
Speaker 1: so owning that diverse basket of hundreds or even thousands

804
00:35:51,040 --> 00:35:54,400
Speaker 1: of stocks, it means you're going to be average. And

805
00:35:54,440 --> 00:35:57,239
Speaker 1: most people they bocket that because everybody wants to be

806
00:35:57,239 --> 00:35:59,680
Speaker 1: better than average at pretty much everything, and most of

807
00:35:59,719 --> 00:36:02,320
Speaker 1: us are unwilling to admit when we are average or

808
00:36:02,360 --> 00:36:05,919
Speaker 1: maybe even below average at things. And the problem is, Matt,

809
00:36:05,960 --> 00:36:09,440
Speaker 1: I think that most people think that working harder or

810
00:36:09,480 --> 00:36:12,360
Speaker 1: developing more of a skill at something is going to

811
00:36:12,360 --> 00:36:14,520
Speaker 1: make them a better investor. But an investing it just

812
00:36:14,560 --> 00:36:16,920
Speaker 1: doesn't work like that. It works like that in almost

813
00:36:16,920 --> 00:36:19,160
Speaker 1: every other facet of life. Like the harder you work

814
00:36:19,160 --> 00:36:21,239
Speaker 1: and the more skill that you hone, you're going to

815
00:36:21,280 --> 00:36:23,080
Speaker 1: get better at your job. You're going to become a

816
00:36:23,120 --> 00:36:25,560
Speaker 1: better parent, You're going to become better at a whole lot,

817
00:36:25,600 --> 00:36:27,680
Speaker 1: maybe a better swimmer. Like whatever your hobby is, the

818
00:36:27,680 --> 00:36:30,279
Speaker 1: more you practice it, you're going to get better. But

819
00:36:30,480 --> 00:36:33,799
Speaker 1: that's just not the case with stock picking. And so yeah,

820
00:36:33,880 --> 00:36:37,120
Speaker 1: owning fewer hand pickstocks, we would say gives you a

821
00:36:37,239 --> 00:36:40,440
Speaker 1: chance in outperforming, but you've also then got better odds

822
00:36:40,520 --> 00:36:43,560
Speaker 1: of severely underperforming too. Makes me think of that bet

823
00:36:43,600 --> 00:36:45,000
Speaker 1: I think we've talked about it on the show Matt

824
00:36:45,000 --> 00:36:48,319
Speaker 1: that Warren Buffett had with a hedge fund manager, and

825
00:36:48,360 --> 00:36:50,600
Speaker 1: this was over a ten year period and it was

826
00:36:50,640 --> 00:36:52,880
Speaker 1: a million dollar bet. They gave the million dollars to charity.

827
00:36:53,080 --> 00:36:55,080
Speaker 1: Who do you think ended up winning? That old pal

828
00:36:55,160 --> 00:36:59,280
Speaker 1: Warren Buffet. Of course, he never loses, and he loses

829
00:36:59,360 --> 00:37:02,440
Speaker 1: very infrequently. Yes he does, he does. Overall, he mostly

830
00:37:02,440 --> 00:37:05,080
Speaker 1: a winner. And basically what happened over that ten year period,

831
00:37:05,120 --> 00:37:07,239
Speaker 1: the hedge fund manager was like, oh, yeah, we'll crush you.

832
00:37:07,320 --> 00:37:09,520
Speaker 1: What did Warren do? He invested in the S and

833
00:37:09,520 --> 00:37:12,080
Speaker 1: P five hundred in X fund like super basic bought

834
00:37:12,120 --> 00:37:14,719
Speaker 1: all the stocks, and he made one hundred and twenty

835
00:37:14,760 --> 00:37:17,000
Speaker 1: five percent return over that ten year period. The hedge

836
00:37:17,000 --> 00:37:20,040
Speaker 1: fund thirty six percent return. It's a big difference. And

837
00:37:20,120 --> 00:37:23,640
Speaker 1: so yeah, that diversification not only does it provide peace

838
00:37:23,640 --> 00:37:25,800
Speaker 1: of mind, but it ensures that you're going to be average,

839
00:37:25,840 --> 00:37:28,200
Speaker 1: and that is actually not a bad thing exactly.

840
00:37:28,280 --> 00:37:30,239
Speaker 2: Well, I mean, on the topic of being average, I

841
00:37:30,239 --> 00:37:32,520
Speaker 2: think it kind of comes down to, like, so often

842
00:37:32,560 --> 00:37:34,880
Speaker 2: what we hear is that it's not good to be average,

843
00:37:34,920 --> 00:37:36,560
Speaker 2: right right, Like we want to be exceptional, we want

844
00:37:36,560 --> 00:37:38,840
Speaker 2: to be the standouts. But it just depends on what

845
00:37:38,880 --> 00:37:41,880
Speaker 2: you're talking about. If you're talking about the average American, sure,

846
00:37:41,960 --> 00:37:44,160
Speaker 2: like you probably don't want to be like the average American.

847
00:37:44,200 --> 00:37:46,839
Speaker 2: That's because the average American has sixty two hundred dollars

848
00:37:46,920 --> 00:37:47,800
Speaker 2: balance on their credit.

849
00:37:47,680 --> 00:37:49,720
Speaker 1: Cards right now right watches four hours of TV.

850
00:37:49,719 --> 00:37:52,200
Speaker 2: Day exactly, or they have like around forty thousand dollars

851
00:37:52,239 --> 00:37:54,600
Speaker 2: in student loans. These aren't the kind of averages that

852
00:37:54,640 --> 00:37:56,960
Speaker 2: you want to aspire to be like. But when we're

853
00:37:57,000 --> 00:37:59,120
Speaker 2: talking about the market, or we're talking about growing your

854
00:37:59,160 --> 00:38:01,919
Speaker 2: net worth through your portfolio by ten percent every year,

855
00:38:02,440 --> 00:38:03,400
Speaker 2: that's the kind of average.

856
00:38:03,440 --> 00:38:05,880
Speaker 1: That sounds awesome. Yeah, that's the kind of average that

857
00:38:05,920 --> 00:38:07,600
Speaker 1: we want to be. Like that's like hitting a triple

858
00:38:07,680 --> 00:38:09,440
Speaker 1: every single game and you know what all the time,

859
00:38:09,480 --> 00:38:10,800
Speaker 1: You're going to stay in the majors for like fifteen

860
00:38:10,880 --> 00:38:11,799
Speaker 1: years if you do that. Yeah.

861
00:38:11,800 --> 00:38:14,759
Speaker 2: Absolutely, I mean honestly, Like, despite all of the other

862
00:38:14,880 --> 00:38:17,400
Speaker 2: reasons not to invest your hard earned money into just

863
00:38:17,440 --> 00:38:20,399
Speaker 2: a few companies single stock investing, it just takes more time,

864
00:38:20,440 --> 00:38:22,680
Speaker 2: it takes more brain space. That being said, like, I'm

865
00:38:22,680 --> 00:38:25,920
Speaker 2: definitely willing to give more of my cognitive abilities to

866
00:38:26,440 --> 00:38:29,000
Speaker 2: something where I can make more money. I'm specifically thinking

867
00:38:29,040 --> 00:38:31,440
Speaker 2: about owning rental properties. That's one of the things that

868
00:38:31,600 --> 00:38:33,880
Speaker 2: requires a little bit more time and attention compared to

869
00:38:33,960 --> 00:38:37,640
Speaker 2: passively investing in the market. While I definitely love me

870
00:38:37,719 --> 00:38:40,320
Speaker 2: some index funds, I also love owning local real estate.

871
00:38:40,960 --> 00:38:44,319
Speaker 2: But there's a replicable business model here and it's got

872
00:38:44,360 --> 00:38:47,200
Speaker 2: a lot less risk attached to it. Investing in the

873
00:38:47,280 --> 00:38:49,439
Speaker 2: market is just one of those rare arenas. Like you said,

874
00:38:49,440 --> 00:38:52,360
Speaker 2: you'll w we're working harder, doing more, It almost always

875
00:38:52,520 --> 00:38:56,200
Speaker 2: leads to worse results. It's just shocking because nothing else

876
00:38:56,239 --> 00:38:59,120
Speaker 2: in life works like that. Like you're gonna get ahead

877
00:38:59,120 --> 00:39:00,960
Speaker 2: in your job. You're gonna build that muscle mass more

878
00:39:01,040 --> 00:39:03,400
Speaker 2: quickly by putting in more work. And it's just not

879
00:39:03,480 --> 00:39:06,040
Speaker 2: the case with investing in the stock market for most folks.

880
00:39:06,320 --> 00:39:08,600
Speaker 2: In this case, the lazier that you are, the better

881
00:39:08,600 --> 00:39:09,160
Speaker 2: off you're going to do.

882
00:39:09,200 --> 00:39:11,040
Speaker 1: And almost nobody gives you permission to be lazy. But

883
00:39:11,040 --> 00:39:12,520
Speaker 1: we're going to give you permission to be lazy when

884
00:39:12,560 --> 00:39:14,000
Speaker 1: it comes to how you invest and if you just

885
00:39:14,040 --> 00:39:16,359
Speaker 1: go the lazy route, it's going to end up better

886
00:39:16,400 --> 00:39:16,719
Speaker 1: for you.

887
00:39:16,800 --> 00:39:20,120
Speaker 2: Like pay less attention to your overall health right, pay

888
00:39:20,200 --> 00:39:22,840
Speaker 2: less attention to maintaining your car, pay less attention to

889
00:39:22,840 --> 00:39:23,160
Speaker 2: your life.

890
00:39:23,200 --> 00:39:24,200
Speaker 1: What are you going to tell you that, We're not

891
00:39:24,239 --> 00:39:26,160
Speaker 1: going to tell you that put pay less attention to

892
00:39:26,520 --> 00:39:30,759
Speaker 1: your investments and go actually will pan out. Stupid simple route, Yeah,

893
00:39:30,760 --> 00:39:33,040
Speaker 1: you just mentioned basically simplicity is the key there. Yes

894
00:39:33,160 --> 00:39:35,080
Speaker 1: that if you keep it if you keep it simple,

895
00:39:35,360 --> 00:39:37,480
Speaker 1: it means you don't have to do all that research

896
00:39:37,840 --> 00:39:41,160
Speaker 1: that sounds honestly daunting to try to figure out which

897
00:39:41,160 --> 00:39:43,960
Speaker 1: companies to invest in. You can go the lazy route

898
00:39:44,040 --> 00:39:47,759
Speaker 1: and still succeed, which I think is impressive, and that's

899
00:39:47,760 --> 00:39:50,879
Speaker 1: a winning argument. From where I'm sitting at least. And so, yeah,

900
00:39:50,920 --> 00:39:53,120
Speaker 1: if you really really are the kind of person who

901
00:39:53,160 --> 00:39:56,400
Speaker 1: wants to buy single stocks for fun, here's what we

902
00:39:56,440 --> 00:39:58,560
Speaker 1: got to say, go for it, right, because we can't

903
00:39:58,600 --> 00:40:02,080
Speaker 1: necessarily convince you otherwise, And so just make sure that

904
00:40:02,120 --> 00:40:04,560
Speaker 1: you're doing it with only a small amount of your portfolio.

905
00:40:04,640 --> 00:40:07,719
Speaker 1: We suggest really at most five percent of your overall

906
00:40:08,160 --> 00:40:11,440
Speaker 1: investments be dedicated to outlier investments, which we're going to

907
00:40:11,440 --> 00:40:13,759
Speaker 1: call them, like crypto or single stocks.

908
00:40:13,239 --> 00:40:16,080
Speaker 2: And five percent combined, not like five percent of each. Right,

909
00:40:16,120 --> 00:40:18,000
Speaker 2: So if you've got one hundred thousand dollars, going to

910
00:40:18,040 --> 00:40:20,760
Speaker 2: put five percent towards crypto, five percent towards single stocks,

911
00:40:20,760 --> 00:40:23,680
Speaker 2: five percent towards art no, no, five percent combined.

912
00:40:23,440 --> 00:40:26,560
Speaker 1: Five percent towards farmland no or maybe like a bottle

913
00:40:26,600 --> 00:40:29,040
Speaker 1: of wine on vno vests, that kind of stuff. But

914
00:40:29,440 --> 00:40:31,960
Speaker 1: really it's helpful to create something like a firewall to

915
00:40:32,000 --> 00:40:35,200
Speaker 1: prevent that interest from spreading and contaminating the rest of

916
00:40:35,239 --> 00:40:38,560
Speaker 1: your portfolio that you've decided to be boring with, right

917
00:40:38,640 --> 00:40:41,040
Speaker 1: that you've decided to go the lazy routes, And one

918
00:40:41,080 --> 00:40:44,240
Speaker 1: way to do that is to only invest in single

919
00:40:44,239 --> 00:40:47,600
Speaker 1: stocks let's say inside of a brokerage account, and only

920
00:40:47,920 --> 00:40:51,120
Speaker 1: after you've maxed out those tax advantaged accounts. And basically

921
00:40:51,200 --> 00:40:53,440
Speaker 1: that's going to ensure that you take the prudent route

922
00:40:53,640 --> 00:40:56,040
Speaker 1: with the vast majority of your investment dollars, right, and

923
00:40:56,080 --> 00:40:58,840
Speaker 1: that you can enjoy trading single stocks with fun money

924
00:40:58,880 --> 00:41:00,959
Speaker 1: on the side, and you're actually going to be worried

925
00:41:00,960 --> 00:41:04,200
Speaker 1: about losing your retirement dollars by doing it. And so, yeah,

926
00:41:04,440 --> 00:41:07,239
Speaker 1: ultimately we're offering our opinion here. You don't have to

927
00:41:07,280 --> 00:41:09,319
Speaker 1: agree with us, but it is something that we feel

928
00:41:09,320 --> 00:41:12,120
Speaker 1: strongly about, and you know, unless we're confronted with data

929
00:41:12,200 --> 00:41:14,800
Speaker 1: that shows otherwise, we're going to kind of keep singing

930
00:41:14,800 --> 00:41:17,560
Speaker 1: this tune. Obviously, hindsight is twenty twenty. If I had

931
00:41:17,600 --> 00:41:19,360
Speaker 1: a time machine, I'd go back to twenty fifteen and

932
00:41:19,400 --> 00:41:21,279
Speaker 1: put a lot of money in Tesla because I'm not

933
00:41:21,320 --> 00:41:23,360
Speaker 1: an idiot. But most of us, we don't have that

934
00:41:23,440 --> 00:41:26,719
Speaker 1: sort of prognostication ability. Yeah. Absolutely, what other thing too.

935
00:41:26,719 --> 00:41:29,080
Speaker 2: I wanted to mention just because now you know that

936
00:41:29,120 --> 00:41:31,320
Speaker 2: you should be investing in index funds, that doesn't necessarily

937
00:41:31,360 --> 00:41:33,239
Speaker 2: mean that you should be investing right out of the

938
00:41:33,280 --> 00:41:35,920
Speaker 2: gate as well. There are other foundational steps that you

939
00:41:35,960 --> 00:41:38,160
Speaker 2: need to take with your personal finances, like paying off

940
00:41:38,239 --> 00:41:39,960
Speaker 2: high interest rate debt. Things like that, you want to

941
00:41:39,960 --> 00:41:41,960
Speaker 2: make sure you've got that emergency fund set up. Those

942
00:41:41,960 --> 00:41:43,799
Speaker 2: are some of the initial money gears that you need

943
00:41:43,840 --> 00:41:47,640
Speaker 2: to power through first before you are investing substantial amounts

944
00:41:47,640 --> 00:41:49,840
Speaker 2: of your money. If you haven't listened to that episode,

945
00:41:50,120 --> 00:41:52,400
Speaker 2: it was three oh two, that's where we introduced the

946
00:41:52,480 --> 00:41:55,000
Speaker 2: idea of the money gears, We would recommend that you

947
00:41:55,000 --> 00:41:55,920
Speaker 2: go back and listen to that.

948
00:41:55,920 --> 00:41:56,560
Speaker 1: One as well.

949
00:41:56,960 --> 00:41:59,600
Speaker 2: But speaking of gears, let's shift gears. Let's get back

950
00:41:59,600 --> 00:42:02,640
Speaker 2: to the beer that you and I shared during this episode.

951
00:42:02,719 --> 00:42:05,359
Speaker 2: And we shared one, but this is one where oftentimes

952
00:42:05,520 --> 00:42:07,760
Speaker 2: like it's a smaller bottle. I definitely could have enjoyed

953
00:42:07,920 --> 00:42:10,640
Speaker 2: my own bottles of this instead of sharing. I should

954
00:42:10,680 --> 00:42:13,040
Speaker 2: have picked up two five ounces. That's a Joel fail

955
00:42:13,160 --> 00:42:15,800
Speaker 2: right there. I'll claim it's what it's like, slightly smaller.

956
00:42:15,920 --> 00:42:18,960
Speaker 2: It's definitely not a sixteen ounce pint, but it's an

957
00:42:19,000 --> 00:42:21,319
Speaker 2: eleven point two ounces, and I swear I missed that

958
00:42:21,360 --> 00:42:23,560
Speaker 2: point eight ounce se point.

959
00:42:23,440 --> 00:42:25,640
Speaker 1: Four each of this delicious beer. But yeah, what were

960
00:42:25,680 --> 00:42:28,840
Speaker 1: your thoughts on it? Okay, So I really enjoyed it,

961
00:42:28,880 --> 00:42:30,200
Speaker 1: and I agree I could have used a little bit

962
00:42:30,239 --> 00:42:32,960
Speaker 1: more because it's I love me a good quad. I

963
00:42:32,960 --> 00:42:34,719
Speaker 1: think it's the first style of beer I was really

964
00:42:34,800 --> 00:42:38,960
Speaker 1: attracted to when I started drinking craft beer. And this

965
00:42:39,040 --> 00:42:41,520
Speaker 1: is like dark fruits. It's got a velvety kind of

966
00:42:41,600 --> 00:42:45,520
Speaker 1: vibe going on. It's rich and malty and very multi

967
00:42:45,640 --> 00:42:48,840
Speaker 1: what's better than a good Trappist quad? Not many things.

968
00:42:48,880 --> 00:42:50,879
Speaker 1: And so if you like dark beers, if you're into

969
00:42:50,920 --> 00:42:54,000
Speaker 1: stouts but don't really haven't really given quads a shot,

970
00:42:54,200 --> 00:42:57,120
Speaker 1: then I would say, like, get you a legit Belgian

971
00:42:57,360 --> 00:43:00,279
Speaker 1: Trappist quad, because there were was like seven or eight

972
00:43:00,400 --> 00:43:02,719
Speaker 1: Trappis breweries I think around the world. Oh yeah, most

973
00:43:02,719 --> 00:43:05,120
Speaker 1: of them are in Belgium. Yeah, you're talking about an

974
00:43:05,239 --> 00:43:08,600
Speaker 1: article you came across. Former in danger of not producing

975
00:43:08,640 --> 00:43:10,680
Speaker 1: as much beer in the future because it's hardness. Many

976
00:43:10,680 --> 00:43:12,919
Speaker 1: people who want to be monks apparently like h and

977
00:43:13,000 --> 00:43:15,799
Speaker 1: so does that surprise you, No, it doesn't. But when

978
00:43:15,800 --> 00:43:17,640
Speaker 1: I think needs to happen, sign me up to live

979
00:43:17,680 --> 00:43:20,879
Speaker 1: this CELLI bate life. I think I think they need

980
00:43:20,920 --> 00:43:22,960
Speaker 1: some monk influencers on TikTok is what they need to do.

981
00:43:23,040 --> 00:43:25,160
Speaker 1: That's gonna be what jump starts them. Is that gonna

982
00:43:25,160 --> 00:43:27,160
Speaker 1: be the tipping point. It's gonna be the proper recruiting tool,

983
00:43:27,200 --> 00:43:27,680
Speaker 1: I think.

984
00:43:27,719 --> 00:43:30,040
Speaker 2: Hopefully, because I would hate to see this style die out.

985
00:43:30,080 --> 00:43:33,120
Speaker 2: But I agree, you've got those like those dark caramelized,

986
00:43:33,239 --> 00:43:34,560
Speaker 2: you know, caramel like flavors.

987
00:43:35,200 --> 00:43:36,320
Speaker 1: It's just super warming.

988
00:43:36,360 --> 00:43:37,960
Speaker 2: This isn't, honestly the kind of beer that you want

989
00:43:37,960 --> 00:43:41,080
Speaker 2: to enjoy on a spring pre summer day as the

990
00:43:41,080 --> 00:43:43,600
Speaker 2: temperatures are rising. This is more kind of like sitting

991
00:43:43,600 --> 00:43:46,600
Speaker 2: around the fire at Christmas, Like that's when you want

992
00:43:46,600 --> 00:43:49,160
Speaker 2: to typically pull out like a Belgian Quad, because it's

993
00:43:49,200 --> 00:43:52,000
Speaker 2: just full bodied, lots of different flavors, real bready, almost

994
00:43:52,040 --> 00:43:53,480
Speaker 2: like you kind of have like a fresh loaf right

995
00:43:53,480 --> 00:43:55,680
Speaker 2: out of the oven. It's just very makes it feel

996
00:43:55,680 --> 00:43:56,880
Speaker 2: like you're at home somehow.

997
00:43:56,960 --> 00:43:58,280
Speaker 1: Yeah, but yeah, totally agree.

998
00:43:58,320 --> 00:44:00,520
Speaker 2: If I would say, if you have been dream if

999
00:44:00,520 --> 00:44:02,759
Speaker 2: you're like, oh, I like Guinness or I like some

1000
00:44:02,800 --> 00:44:05,960
Speaker 2: of those darker beers, go in the direction of Belgian quads,

1001
00:44:06,000 --> 00:44:09,479
Speaker 2: because it'll maintain some of those darker flavors, but it'll

1002
00:44:09,480 --> 00:44:11,200
Speaker 2: definitely just punch it up a little bit and give

1003
00:44:11,239 --> 00:44:13,279
Speaker 2: you a lot more to taste as you're drinking those.

1004
00:44:13,320 --> 00:44:15,080
Speaker 1: We have a variety of notes going on in a

1005
00:44:15,120 --> 00:44:17,959
Speaker 1: quad is just superior typically to what you get in

1006
00:44:18,040 --> 00:44:20,040
Speaker 1: a stout, at least the south that doesn't have a

1007
00:44:20,040 --> 00:44:22,359
Speaker 1: bunch of adjuncts thrown in it. But totally I saw.

1008
00:44:22,360 --> 00:44:24,279
Speaker 1: I'm always game for these kind of beers. This one

1009
00:44:24,360 --> 00:44:26,040
Speaker 1: I hadn't had in years. It was good to have

1010
00:44:26,080 --> 00:44:27,560
Speaker 1: this one again today on the show.

1011
00:44:27,680 --> 00:44:29,000
Speaker 2: YEP, And again I don't know if I'm going to

1012
00:44:29,040 --> 00:44:32,960
Speaker 2: pronounce this correctly, but it's Trappistez Roquefort. That is that

1013
00:44:32,960 --> 00:44:37,160
Speaker 2: so I gonna say roach Furt, but roach Afford. It's

1014
00:44:37,200 --> 00:44:37,839
Speaker 2: definitely not.

1015
00:44:37,760 --> 00:44:39,600
Speaker 1: That so coming through, I guess.

1016
00:44:39,640 --> 00:44:42,360
Speaker 2: But we will simply post a picture up like we

1017
00:44:42,400 --> 00:44:45,000
Speaker 2: normally do within our show notes for this episode, up

1018
00:44:45,000 --> 00:44:47,720
Speaker 2: on the website at how tomoney dot com. But Joel,

1019
00:44:47,719 --> 00:44:49,879
Speaker 2: that's gonna be a buddy. So until next time, best

1020
00:44:49,920 --> 00:45:03,400
Speaker 2: friends out, best Friends out.

1021
00:45:01,320 --> 00:45:02,879
Speaker 1: The po