Posts

The Conch

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Last week’s financial services industry news of Schwab and other brokerage firms cutting commission rates to zero reminded me of one of the two books I read in High School (no Cliff Notes).  The book, Lord of the Flies, described how a group of marooned kids organized themselves.  They utilized a shell, The Conch, to signify who could talk at their large gatherings.  The meetings were organized by Ralph who would limit the time each kid took.  This week I will discuss who has The Conch and what they are telling us to do.  I will play the role of Ralph and decide when its time to pass The Conch.
Wall Street
Wall Street has had the conch for years.  They created high margin products and “sold” them to their clients.  This structure was exposed during the Financial Crisis and opened the door for competitors to educate their clients about these conflicts of interest.  The other area Wall Street made money was supporting Hedge Funds through their Prime Brokerage unit.  This group provided …

Perfect Podcasts

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Perfect conversations and Podcasts are in the eye of the beholder.  My podcasts and my children are perfect in my humble opinion.  I continue to simplify this monthly summary to organize the list and hopefully you will agree with me.  Apple has a head start with their star based rating system. Twitter followers and downloads matter too.  This month has some new items I hope you like too.


Business Podcasts
My new favorite is Naval - How to get Rich.  I've found that this podcast delivers ideas that will cause you to think and falls into my perfect podcast group.  My advice is to listen to each podcast numerous times.  Our first impression might be wrong.


Dramas 

We all need a break from our daily life and from academic content.  I love movies and live theater as an escape from daily life.  Drama podcasts with a good script and good actors are perfect.  My favorite is 1619.  This podcast is a double whammy.  It is moving and it educates us on the history of slavery. 

There are no perf…

Boone

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Mr. Pickens, Boone to his friends, passed away on September 11, 2019.  This blog will summarize the numerous lessons that Boone lived and shared with us during his amazing life.  We hope you will reference and adopt them in your personal and professional lives.  Boone shared most of these beliefs with his co-workers, friends, investors and the traditional media.  Many of his beliefs are common to successful people, however, his generous heart is unique.
Great at Making Money
Boone was great at and enjoyed making money.  It was a challenge that he mastered first as a Wildcatter in the oil business. He understood that every deal wouldn’t work out as planed and he was able to evaluate where he could improve his results on subsequent deals.  He was self-aware.  Boone took his experience to his next ordeal in the public markets with Mesa and as a corporate raider.  Same risk reward profile but the results and prices were public. The mindset and discipline were the same.  Boone’s next ventu…

Pick on Someone Your Own Size

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The financial press has been filled with articles about RIA transactions.  I’m happy for the industry but I think we need evaluate how we got here.  My blog this week will examine why RIAs are growing and selling at an unprecedented pace,  One of my RIA friends observed that we got here by positioning ourselves versus the ills of Wall Street.  I’m not as PC as my friend so I will take a hard look at how RIAs need to pick on somebody there own size.  RIAs have a stellar reputation of always doing the right thing for there clients.  We don’t need to be a bully to grow and ultimately sell our practice.  Here are some ways we are picking on our competition.

Wall Street
Clients and their advisors know that Wall Street has many conflicts of interest.  Selling against that fact seems to have run its course.  The breakaway advisors I follow after they realize that a fiduciary standard does NOT pay well start to adopt Wall Street conflicts to narrow the pay gap.  My April 2016 article is worth  …

No Free Lunch

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As we have discussed in the past monthly summaries the number of Podcasts is exploding.  That is the good news but the bad news as discussed in the Wall Street Journal is that the free model with limited advertising is not working.  Specifically podcast listeners are not buying enough products from the sponsors of the shows to pay the bills.  Several popular podcast are signing up name brand (read wealthy) companies to sponsor the podcast and pay the bills.  This reality coupled with the fact that most podcasts hit the wall at 12 episodes has caused us to tweek our monthly categories to include monetary support and frequency.  This “pivot" should improve our summery. Please share your opinions through the comment field.  

Funded
HBS has the dough and they are releasing numerous podcasts that I have found very helpful.  My current favorite is Cold Call.  I know we hate that term but the podcast covers case studies from HBS and the presenters are actual HBS professors.  I might have …

Elasticity

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Last week’s tumultuous market moves caused me to revisit an old economics concept of elasticity of demand. Don’t worry there won’t be a test at the end of our post, but we want to examine several real world concepts that impact the wealth advisory world.  Unfortunately the academic concepts and other rules of thumb aren’t helpful in the real world.

Fees
Most business relationships start and continue with a fee analysis.  The only guaranteed fee reduction is to cut out the middleman.  Once the client identifies the Middleman we can start focussing on the fees that matter.  ETFs and The Internet have been effective disrupters of the Middleman.  The challenge for clients and advisors is that indiscriminately cutting fees can leave us with a poor solution.  We need to understand what is provided for each fee so we don’t end up driving a car that runs but is embarrassing.

Tariffs 
The trade war with China was one of the many reasons for the market selloff.  Whether the President is correct or …

Hacked

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Technlogy is a double edged sword.  Technology has made our lives easier but as we bought more smart phones we also became more vulnerable to being hacked.  The Russians and other hackers have attacked our elections and recently have attacked our businesses.  These hacks are news worthy but until we are personally hacked it is someone else’s problem.  I have been hacked but the credit card monitoring software caught the hacker before they could buy a car using my identity.  While it scared me it confirmed Jamie Dimond’s statement that hacking is our country's greatest risk.  Banks will contunue to invest in solutions to combat hackers and we will need to trust but monitor our accounts.  Our monthly  review of our favorite podcats will continue.  Hackers be damned!

First Person
We are moved by the real world podcasts that summarize the experiences of real people from the first peson perspective.  Real trumps fiction and actual stories move us.  Our favorite is Room 20.  First pers…