031 | Future-Proof Your Portfolio: Strategies for Global Instability

Patrick Longergan [0:06 – 2:21]: Welcome back to the Vital Strategies podcast. I’m your host, Patrick Lonergan. And in today’s episode, we’re continuing the discussion on investments. This time, we’re digging into what it looks like to build a portfolio to protect against when the world falls apart. We are talking with Matt Pearce. Matt is a member of our investment advisory team and is a chartered financial analyst, which is the top designation in the investment advisory arena. Matt is a critical member of the team that helps design and implement client portfolios based on their goals. Together, we discuss in detail the concerns some of our clients have about the state of the world and what to do if we’re on the brink of a financial meltdown. Stay tuned as we explore the fundamentals of building a portfolio that can weather the financial storms that come up out of nowhere. We cover everything from how social media shapes our thoughts on investments to what to do about the upcoming demographic shifts, effects on global warming, on the economy, and the impact of government intervention. Let’s dive in with Matt Pearce. Matt, thank you for joining us. I am excited about this conversation. The reason I reached out to you was really because we’ve had a few different clients point us to a book. I don’t think it’s necessarily the book that matters. The book’s title is the end of the world as we know it is just the beginning by Peter Zahan. We’ll just go with that. We’ll have links in the show notes to the book, so you can go find it. But I think it underpins the general uneasiness that some of our clients have about where are we at from a global political perspective? You know, we’ve got everything from an aging demographic in some countries to young, growing demographic in other countries. And the United States is a superpower and how that affects things. And we’ve got some clients that are literally prepping for the end, right? Like, they’re, they, they’ve bought vehicles that don’t have any electronics in them. They’re so old school that if the EMP comes, they can still, like, get someplace. I’m like, well, okay, hey. And, uh, you know, they’ve got meals ready to eat and water, and, you know, they’re sort of hoarding some commodities. And so, like, this is just a real thing that people are paying attention to. And I think it’s an interesting conversation for us as financial advisors to sort of dig in and really just go, okay, how do we navigate these discussions? And there might be some truth to some of these concerns that are out there. And so I’m just looking forward to navigating all of that with you here today. So thanks for joining us.

Speaker B [2:21 – 2:24]: Yeah, yeah, I’m excited. Glad to be here.

Patrick Longergan [2:24 – 2:50]: Yeah. So when we got together for our team meeting in Austin at the beginning of the year, we sort of touched on some of these pieces around how to maybe be defensive in regards to building a portfolio. So can you just start to lay the foundation for how we look at some of these things and then maybe some of the concerns that you are seeing out there around these pieces with the political, economic concerns? So, yeah, can you just lay the foundation for us? There’s.

Speaker B [2:50 – 3:28]: Yeah, I mean, certainly a myriad number of things we can get to on the concerns side, and I’m sure we will dive into many of those. One thing that just kind of came to mind in terms of your comment around it being in the air to an extent, I find the timing of it interesting because I think there was a big kind of influx and interest in this stuff in the wake of the financial crisis, but this is seemingly happening under the ostensibly strong economy with markets near all time highs, and yet this kind of growing zeitgeist is emerging underneath the surface. I think the timing of that is interesting. I don’t know that there’s anything to extrapolate from that other than it’s just an interesting factoid there.

Patrick Longergan [3:29 – 3:29]: Yeah.

Speaker B [3:29 – 4:12]: But in terms of the foundation piece here, I think it’s critical for you and I, as advisors and investment managers on behalf of clients, and for our clients as well, to have a philosophy or framework around the how and why of your investing. You know, otherwise, we’re inundated with data. If we were having this conversation, well, we wouldn’t have been having this conversation in the, you know, in the twenties or the thirties, like, you know, would have been happening via telegraph or something like that. You know, the speed of information, the volume of information has just been, you know, ratcheted up to such an exponential degree that, you know, can be really overwhelming, and particularly when a lot of these headlines are troubling, to say the least. Again, well, we’ll get into all those.

Patrick Longergan [4:12 – 5:05]: But can I touch on that for just a second? Because one thing that I think is also important to recognize is right now, the way the marketing works around news is I need your attention. Right. And so the best way to get your attention is to create some outrage, right? Like, let’s get you awfully spun up about this thing. And so I think that may cause part of the problem. Right? Like, yeah, if we look at all of the headlines, it’s going to make me really want to just get in the fetal position and be like, this is ending. So I think that’s something that’s good to acknowledge because our attention’s so valuable, right? Like, that’s why social media platforms are free, because they get our attention and then they can sell advertising. And the news platforms are the same way. They don’t cost me anything, but they’re selling advertising. And if I’m outraged, I show up tomorrow and I consume more and, you know, they get to sell more advertising dollars. So we should not lose sight of the fact that these platforms all have an incentive for us to show up tomorrow because they need to sell more.

Speaker B [5:05 – 5:58]: Advertising and to reinforce our in build biases and all that as well. You know, kind of enforced our echo chamber. Yeah. Just another aside on that. I saw something. Someone posted an Instagram post side by side of the same post and how the comments were different for the two spouses. So the female in the relationship was getting all things. Like, the post was something about, like, a husband being out golfing or something like that. And the wife was, you know, vexed by this, and all of the wife’s comments were supporting the wife. And then the husband read the exact same post. His top comments were, she needs to get off his back, stop nagging him, et cetera, et cetera. So, I mean, it’s like, I mean, you know, we know this is happening, but, like, when you see a visceral example of that, like, I mean, these systems are engineered to get us to kind of stick to our preconceived notions and biases and just feed on that.

Patrick Longergan [5:58 – 6:09]: Good. Sorry, I just thought that was a nice little sidebar to acknowledge the fact that all of these things that are coming at us before making our decisions based on the headlines, it can be a problem. So, yeah.

Speaker B [6:09 – 7:43]: Yep. I’m sure there’ll be plenty more interesting sidebars. Sidebar way. Yeah. So kind of getting back to that framework or foundation to that point, like that needs to be the lens through which you’re viewing all this incoming information, and you can then hopefully better synthesize this. Is this something that is important or fits within this overall philosophy? If not, then discard. So I think without that, to your point, we’re just bouncing from headline to headline and the crisis du jour, whatever’s topical in the media, you know, if it bleeds, it leads type of thing. Like, we’re just bouncing from headline to headline. So I think that’s super, super important to make sure you’ve got this framework and philosophy around the how and the why of your investment strategy. Couple things, you know, within that, I mean, we’ve already alluded to this in the social media aside, there being cognizant of our own biases and emotions, I think are super, super important when it comes to investing. If you have a propensity or a need to keep up with the index, if you are super anxious about your portfolio being different than, say, the S and P 500 or whatever you’re seeing on the nightly news, then you probably shouldn’t be vastly different from that. And you need to know that going in. So picking up on some headline and then investing in a way that deviates from that, it could still ultimately be a good investment. But in the short term, if it’s causing you anxiety because you’re deviating from the performance of whatever you perceive as your benchmark, you can kind of disrupt or hijack the philosophy.

Patrick Longergan [7:43 – 7:52]: Okay, so I want to talk about that for a second. So I read a book recently called thinking in bets, and I’ve referenced this book a few times. It’s by Annie Duke, who.

Speaker B [7:52 – 7:53]: Annie Duke. Yeah.

Patrick Longergan [7:53 – 8:04]: Was a professional poker player. And she makes the distinction, and it’s like the light bulb went off, and it’s so good. You can have a good strategy in the short term that gets you what are perceived as bad results. Right?

Speaker B [8:04 – 8:05]: Resulting, she calls it.

Patrick Longergan [8:05 – 9:14]: Yes. Yep. And then I could also have really bad strategy that in the short term, I get good results. So I think about your comment about, can you stand being different? I think the challenge there is, how do I know? Because I can stand being different if me being different is getting me, in the short term, better results than the sort of standard mo. And I think people, some of our clients especially, they’re entrepreneurs. They’re like, I was born different. You know? Um, I. I think different. It sort of served me well to be different. But sometimes there can be some conviction there that leads us to sort of bad long term results because we’re picking, you know, a strategy, but it can also lead to, like, decent short term results because, like, see, look, I guessed right, and it’s like, no, you’re just lucky. So, I don’t know. Do you have any thoughts on, like, I can stand being different if I’m winning? You know, I don’t know if I can stand being different if I’m losing. Do you have any thoughts on, like, how we can determine if I’m okay being different? Because I think they give some examples in that book. Like, there was the Greek who was like, okay, being different and just kept losing and, and basically went broke. So you just like committed to that strategy. But yeah. Do you have any thoughts on like how can I really tell if I can stand being different or not?

Speaker B [9:15 – 10:42]: Yeah, that’s a couple of thoughts coming from that. So we’ve had some kind of internal conversations in our investment committee around this and my contention is kind of similar to what you said, that I think everyone’s bought into this kind of passive just by the s and p 500 mindset because it’s worked. And you know, getting back to that philosophy, like they don’t have a core underlying philosophy so they don’t really own it, renting it. They’re renting it because it’s working. And I think getting back to the philosophy point, owning that philosophy and knowing that there are going to be inevitably whatever strategy you pursue in investing, getting back to that resulting idea, you have to commit to the process and the philosophy and knowing that sometimes the outcomes are going to be adverse. But the other thought I had from that is what we try to do on the education side with our clients of, you know, making a compelling case for why they might want to be at least slightly different from that index to kind of insulate themselves from normal circumstances that are different from, you know, the market just consistently going up. And also perhaps some of the abnormal circumstances will be getting to here. And I think, you know, what we tend to find is kind of tempering the extremes. The answer is not to be so, so wildly different that, you know, it’s going to give you anxiety but also not necessarily just sticking to what has worked in the recent past year. And I think that temperance is probably the short answer.

Patrick Longergan [10:42 – 11:23]: Yeah, thats great. Kevin and I have had some discussions around like the magnificent seven. Right. And I think this is a perfect scenario for we can look at the value of those stocks and go, hey maybe theres a business case where it doesnt make sense to have a huge percentage of our holdings include those. Just from pure fundamental perspective, it might be bad strategy to hold onto these for long term just because it doesnt make financial sense anymore. In the short term that might be really painful because they may continue to win, but in the long term that could be a fantastic strategy because I remember sun Microsystems during the tech bubble burst of the early two thousands. I think they were trading at twelve times sales.

Speaker B [11:23 – 11:24]: Yeah.

Patrick Longergan [11:24 – 11:27]: And he was like in what world does this make sense?

Speaker B [11:27 – 11:28]: What were you thinking?

Patrick Longergan [11:28 – 12:45]: You would have to invest the dollar. We would have to have no expenses and it would take you twelve years to get your dollar back at this price. That doesn’t make any sense. And I think we’ve seen multiples higher than that. I think at one point I looked at Tesla and it was like 33 times sales. And I’m like, there’s got to be a lot of innovation and a lot of adoption for that price to ever make sense. And so there’s a business case where those numbers just don’t make sense anymore. And it’s like I’m okay. I think in this example we’re talking about I’m okay making decisions and going all right. I’m all right being different in this scenario because I don’t want to play in that game because it’s most likely going to not work out for me in the long term. So in the short term I’m okay maybe getting less than ideal results for good long term strategy. So I think this, you talk about framework and we love frameworks around here is the framework you’re talking about here, like the investment policy statement, is that where we’re going? Like, hey, we’re defining a set of principles to help us in everything from, because I think time horizon matters. You brought that point up to can I stand being different? And I think we can look at some of the just financial good, solid fundamental investing principles and making sure those are baked into our framework instead of going, hey, I read this thing over here, or my cousin said I need to do this. How does that fit into this discussion?

Speaker B [12:45 – 13:47]: Yeah, I think that is a major component of that. I think codifying, getting down on paper, what is the framework and strategy here, I think helps remove or at least turn down the volume on a lot of that noise and understand, again, focusing on that longer term nature and the strategies and goals. I mean, to your point on short term you may look maybe not foolish, but not as smart as everyone else that’s minting centimillionaires and decimillionaires by the day in Nvidia, Tesla, you name the hot stock. But understanding that if we take a longer span of history here and a longer time horizon view, that continuing to execute on that process is going to, you know, be a much more stable outcome as well, and I think that’s a big part of it as well, is the, you may be capping the upside of your outcomes, but the range of outcomes is much, much smaller. And I think for most people having a little bit more confidence in the range of outcomes versus, you know, what essentially amounts to a lottery ticket is probably a better approach.

Patrick Longergan [13:48 – 14:39]: I love that. And we’ve talked about our clients have so much risk built into their business. And so when we think about our investment portfolio, like we can, with a high degree of certainty, get you to an expected outcome. If all the parameters are correct in regards to allocation and dollar amount, withdrawal rates and all those other things, it’s like, okay, we know within a high degree of certainty we can get you to where you want to go. When we start pushing too many chips into a particular holding or making an adjustment here or there, a bet, it’s like now all bets are off. I have no idea how this is going to play out. Well, we can cross our fingers and hope that it plays out, but yeah, I think that points a very important one. We can get you to an outcome if we design this thing well, so good. Okay. Anything else to add to that? We’ve kind of been all over the place. I’ve got a few follow up questions.

Speaker B [14:39 – 16:05]: Yeah, I think maybe just one last point on the framework piece, and it does tie into some of the things we’ve just said. But within that framework, do you want to act as though you know something about the markets, or act as though you know nothing or close to nothing? And by nothing, I mean being prepared for the myriad number or range of outcomes that could take place, but not making definitive bets on, like you said, kind of pushing your chips into areas of the market versus having a more balanced approach. And on that knowing something piece, an important element, I think, that many investors miss, and not even just kind of novices, professionals alike, is not only do you need to have this kind of correct view on essentially predicting the future, but also the market needs to be mispricing that outcome as well. And this gets back to the point on sun micro system of yore or Nvidia, or pick your hot stock of today, what is already built into that price and how much do they have to exceed those already lofty expectations for you to continue to see the remuneration that many have in those stocks, I think that’s a important to. And as we kind of get into all these various crisis scenarios, what are the market expectations of? Those is an important lens in which to interview those. If you’re seeking to profit from the end of the world, as it were.

Patrick Longergan [16:05 – 17:24]: Yeah. And can I just pause for a second and talk about the know something version? Because I feel like history is littered with people that knew something and then just got crushed. Right. I think if I can give you a big picture example, we can bring it down. But I look at the hedge fund managers that are supposed to have insight into things, and it’s their job to outperform. We’ll call it the indexes and that type of thing. The interesting thing is, I think Warren Buffett has a famous bet out there. It’s ten years. He said, pick your top ten hedge fund managers, and over ten years, the S and P will beat them, and I’ll bet a million bucks on it. And he won. Right. And so if we think about that, hedge fund managers make a ton of money, okay? And their whole goal is to outperform the markets, and they have a huge financial incentive to do that, and we consistently see them not be able to do it. So I think about that as the layperson. Like how I’m supposed to make bets. I’ve got my day job. This isn’t even my full time occupation, trying to pick the winners. And I just find it, I don’t want to say ridiculous, like somebody might have some insight, but it almost seems ridiculous to try to go, yep, I can outperform. I know something the rest of the market doesn’t know, and I can win on that. So I don’t know. That’s more of a statement. I don’t know if you have any comments around that, but it’s something that I think people need to recognize out there when they’re trying to make their bets.

Speaker B [17:24 – 18:15]: Yeah, yeah, I agree. I think particularly in the time horizons in which people are seeking to do that as well. I guess part of me does still think there is maybe some edge to be gleaned from all these points that we’re talking about, you know, kind of human nature on display. You know, there are times that, as Warren Buffett says, you know, people are holding stocks dear and at times, you know, when they’re fearful, like, I think there is still a long term edge to potentially be gleaned from that sort of contrarian behavior, in essence. But in the timeframes in which people are operating, like, I think there is zero edge. And maybe the one or two individuals that have the ability to do that, unless you’ve got $100 million, they’re not taking your phone calls. So for all intents and purposes, I think it’s a fruitless endeavor to try and outperform again. If it doesn’t go up tomorrow, then the idea is terrible and you’re on to the next one.

Patrick Longergan [18:15 – 18:33]: Good. Okay, so thats the know something version. Is it wise then, to take the know nothing point of view? Like, I dont know anything, and I should just have a balanced portfolio and just let the markets do what the markets do and well rebalance the thing. Like, what is a good approach there? Because I think we should talk about that side of the equation too.

Speaker B [18:34 – 20:34]: I think theres a spectrum, and I say that in that weve kind of created a spectrum as well in terms of what we try to provide for clients of that knowing nothing, I guess. So there’s an extreme version, which would be something akin to like an all weather portfolio. And there’s a whole host of different permutations of this that have cropped up over the years. I mean, you could take it back kind of like biblically or ancient history as well. Like there’s a passage in the Talmud that talks about, like, broad diversification, like dividing your assets into reserves, land and business. So like, I mean, you could, you could take it pretty far back, but, you know, I think this all weather concept would be the extreme version of know nothing, which the idea is I want to be kind of equally prepared for whatever macroeconomic outcome may come to pass, so be it. You know, inflation, depression, and anything in between. I want to be equally prepared for any of those outcomes within the portfolio that I’m going to be maximally resilient to all those outcomes. You know, now the flip side is when you’ve got a backdrop of, you know, the last, call it 30, 40 years, that have been pretty benign from an economic standpoint, like having your eggs in the stuff, hitting the fan basket has been a bit of a drag. So the other extreme is like completely ignore those bad outcomes and just stick with some kind of index approach, you know, your, whatever target mixture of stocks and bonds. And then there’s something in the middle which I believe is appropriate for kind of the vast majority of folks to, again, that temperance of the extremes there of. It’s really hard to be vastly different when I think it was like a JP Morgan quote as like, you know, it’s hard for a man to keep his head when everyone’s getting rich around them or something to that effect. So you need to probably, most people still need to have a strong foot in that camp so they’re not succumbing to FOMo or any other things that can disrupt the strategy at the worst time. But it probably doesn’t make sense to completely throw caution to the wind either.

Patrick Longergan [20:34 – 21:22]: Yeah, that’s good. It’s interesting, we had a client that was interested in sort of this all weather portfolio, and this was a number of years ago. It was interesting to look back at commodities during that window, and commodities performed terribly, like double digit losses, like three or four years in a row. And I’m like, how does this, this would be a part of your portfolio. How does this feel to you? And he was like, that seems insane to me. Why would we keep doing that? And I’m like, well, because there’s going to be seasons when commodities are going to perform really well and everything else is going to be in flux. And so we ended up not, not having a huge concentration of commodities in the portfolio. But it was just something to your point, theres going to be pieces of that portfolio that are designed for bad times. And if bad times dont come, its going to be less than an ideal allocation.

Speaker B [21:22 – 21:28]: I mean, thats the cliche, right? Youre not truly diversified. If theres something in your portfolio that you dont hate at any given point.

Patrick Longergan [21:29 – 22:03]: In time, thats good, thats good. So I think a question I have now is were going to get into designing a portfolio and how do we not fall into the camp of like, I know something, right? Like I’m going to make bets that could turn out really bad for me. So how do we temper this? Like, oh, I’ve got the sort of the magic idea that we can apply to my portfolio that’s just going to make it fantastic over the long term. So can we talk a little bit about where we go from here, like the know something versus know nothing and how to design a portfolio that takes all these things into consideration?

Speaker B [22:03 – 22:09]: Yeah, yeah, sounds good. Do you want to hit some of those potential what ifs that are looming out there? Matt?

Patrick Longergan [22:09 – 22:53]: I think that would be great. Okay, Matt, so when we think about sort of the spectrum of where we can go financially, on one hand, we can go up and to the right. Everything economically, politically, it’s sort of peace on earth, everything’s wonderful. Then on the other end is Armageddon. Everything stops working, financial systems meltdown, utilities don’t work. I need to go get in my bunker because it’s, it’s that bad. Now let’s assume neither one of those things are going to happen and we’re going to settle sort of in the middle. And I think there’s a few things to think about. We’ve got real issues demographically taking place in this planet. Like China’s getting older and that’s not going to slow down this one child thing. And then families were just having boys, you know, they were.

Speaker B [22:53 – 22:57]: Who could have foreseen this one, right, lead to some troubles down the road, right now.

Patrick Longergan [22:57 – 23:27]: Now all of their women are past childbearing age. And it’s like not all of them, but majority. It’s like it’s going to take a long time. It’s like they almost need to go back to the drawing board and do the eight child program or something like that to sort of fix it. But again, it swings it too far the other way. And then we’ve got issues politically that we can look at economically. There’s all sorts of things that we can pay attention to. So let’s assume we’re somewhere in the middle between those two extremes that we outlined. And we want to be defensive in our design of our portfolio because we think there’s some risks out there. Where do we start?

Speaker B [23:27 – 25:36]: I think there’s potentially another wrinkle to add in there as well. I’ve had some similar conversations with clients that have concerns around these issues. There’s also a scenario in which you could be right on the outcome, but the consequences are different than you expected as well. And I think maybe going back to that rosy scenario, since we’re on the topic at the end of the world, so we may as well get into all the crazy stuff. Let’s just put it all on the table. Our currency system is such that it is predicated on consistent levels of inflation to maintain itself. And the Fed has a stated objective of 2% inflation, which I won’t get on my soapbox of how that’s just a made up number that they pulled out a thing in there. The head of the New Zealand central bank just concocted this, and then they all decided to follow it. But I said it wasn’t going on my soapbox, and then here I go. But inflation is a prerequisite for the monetary system we have. And there’s this concept of money illusion, where we have a hard time separating real from nominal returns. So nominal returns are the returns you see on your Charles Schwab statement or fidelity statement. My account was up 5%. Real returns are the after inflation returns. So what is my actual gain in terms of, of real purchasing power that those dollars command? So in that scenario, your statement says you’re up five, but inflation was two. Your real growth was only 3%. So much of what we see in asset prices broadly is the effects of that inflation. I mean, not all of it, but there is a portion of it that leads to that chart continuing to move up and to the right. And I do find funny that some of these clients that think the dollar is going to hell in a handbasket which we can certainly get into that one as well. And then the answer is like, I want to short the stock market, or I don’t want to own stocks. No, the actual answer to that, maybe you want to own something, you might not want to own bonds, but cash under the mattress is probably not the best strategy for that. So I know it kind of went a little far afield there, but I think that’s an important element of this as well, is like, again, we could perhaps be lucky enough to divine the future and solve the Rubik’s cube of all these moving parts, but we could be completely wrong on the consequences of it.

Patrick Longergan [25:36 – 25:41]: Thats great. Lets continue on with, how do I design something that takes all these things into consideration?

Speaker B [25:41 – 26:05]: Yeah, I dont think its dissimilar from what weve been talking about, particularly in that middle scenario where were not reverting to barter. And also the stock market doesnt continue to just go up and to the right, mostly uninterrupted, and every kind of blip along the road is immediately reversed, oftentimes with some support and help from the central bank fiscal agents.

Patrick Longergan [26:05 – 27:09]: But nevertheless, I was thinking about, because the conversation we continually are having with our clients, and some of my bias is going to come out here is they’re concerned about recession. They’re like, look, I lived through 2000, I lived through 2008. I’ve looked back in time, and I see economic cycles generally run in about decade timeframes, and in year 16 of this cycle, when we really haven’t had any drop off. So if we just look at that from a very macro perspective, were like, its coming, I dont know why its coming. We really never see it coming until in hindsight, we go, oh, clearly the mortgage market, clearly tech stocks. Right? So I think theres a question from me and my clients. Its like, I also wouldve made the same comment two years ago, and all of the upside I would have missed out on wouldve been tremendous. And so its like, how do we take all that into consideration? How do we design a portfolio thats like, okay, we need to be prepared for some of these. We’ll call it short term corrections. Even if we’re not falling into great depression scenarios, we still might have a recession, and how do we protect ourselves against some of that?

Speaker B [27:10 – 27:35]: Yeah, I mean, the short answer and the boring answer that advisors always trot out is diversification. I think the question then becomes, what? And to what degree? And so, again, I think this kind of gets back to the philosophy of the underlying client. What are you willing to sacrifice in order to avoid or at least soften the blow of that looming recession that’s been looming for seemingly going on a decade now.

Patrick Longergan [27:35 – 28:58]: One thing that you showed us when we were all together at the beginning of the year, which I thought was just super powerful, is the recovery time. I think it was 2008 and the number of months it took to recover with certain portfolio allocations. And it is a little bit contrarian in the sense that when a bear is chasing me, I run away from that. Thats the wise thing to do. When my portfolio drops off, my brain says a bear is chasing me and I should run away from that, which means I should move to a more conservative allocation, which when we see some of these charts on recovery time, the more equities we have, the faster it recovers. Not that we should go crazy and change our allocations in the market, but it’s interesting to see, like holding the course will get us back to even. And I think there’s. Morgan Housel wrote a book called Psychology of Money that I think is great. We’ve sent it to so many clients, but one of the things that he talks about is the price for returns is volatility. And I just love that statement. It’s like we’re going to have money in different buckets. Our money that we need in the next zero to 24 months should not be allocated heavily in the stock market. Like it should be very, very conservative with little market risk. The dollars outside of that, like we should be okay with them having some ups and downs. So I don’t know if you have any thoughts or comments on that, but I think there’s some just general wisdom there that we can take away.

Speaker B [28:58 – 31:22]: Yeah. On the drawdowns that may have been 2022 specifically. So I think that’s another getting back to the, you may predict the outcome, but the consequences may be different. There’s always wrinkles in each crisis. For those that thought real estate was a bulletproof asset and a hedge within a portfolio, 0708, kind of upset that a little bit more recently. Bonds are often viewed as the pillar of stability within a portfolio, but in the 2022 sell off that we saw, they were really the driver of the instability or the volatility. The equity market was really responding to the bond market, not the other way around. And so in that scenario, counterintuitively, the more aggressive portfolio has recovered quicker because the bonds were the source of volatility within the portfolio. And I think that gets back to the diversification point as well. And again, not just the, this caricature version that I think often gets presented. But true diversification if you really want to have kind of resilience in all scenarios, the truth is that every single asset class you own is going to experience a significant drawdown at some point. And if it hasn’t happened yet, you know it’s going to happen likely at some point in your lifetime. You know, we’ve seen 250 percent drawdowns in equities, and now a historic drawdown in bonds in the last 25 years or so. 25% correction in bonds is historically unheard of. Also on the heels of historically unheard of rates being dropped to zero for 15 years. So crazy stuff happens all the time. And even cash is not safe in, again, that real after inflation term. I think the largest drawdown that cash has experienced, in real terms, obviously nominal, it doesn’t move. But in real terms, I think the largest drawdown, Cash’s experience is somewhere on the order of 50%. Maybe it might be higher 50% drawdown in cash in terms of the real purchasing power of that. And that’s in the US, not some banana republic, Weimar Germany like the United States. You can experience a 50% drawdown in the purchasing power of your cash. So again, to me, the answer is, I kind of err more towards that know nothing approach and also tilting towards the equity market and the traditional assets. But having a healthy allocation to things that can do well in environments that are atypical, be it alternative asset classes or alternative strategies that just perform differently than that other stuff.

Patrick Longergan [31:22 – 32:33]: Steven? Yeah, that’s great. So when I think about the average investor has, and it’s worked, and we touched on this, the low cost, I’m going to call it 60 40 stock bond allocation in vanguard, or 70 30, or actually, the more equities you have, the better it’s done over the last decade, 15 years, it’s just been great. So there’s some thinking like, hey, that’s been solved. Like, you just do that and you just hold on to that. So you brought up, okay, I’m going to put some different asset classes inside of that mix of stocks and bonds. And I’m going to make a disclaimer here that we are not giving investment advice. These are just a couple guys talking about different ideas. And you should talk to your financial professional or call us and we’ll set up time to talk about your specific situation. Please don’t go act on these discussion points. But what should if we’re trying to take a defensive approach, and I’ve seen some interesting data around how alternatives smooth out the standard deviation, which is a fancy term for volatility and increase returns. So I get a smoother ride to better returns, which is kind of what we’re all looking for. So what do some of those alternatives look like in a portfolio to go? Yeah, I don’t have any idea what the winners and losers are going to be, but these things seem to make sense in the biggest picture.

Speaker B [32:33 – 35:04]: Yeah, I mean, I think you really succinctly described the impact within a portfolio. I think the important caveat with another one we keep mentioning is what’s your time horizon? So if you’re looking at this and judging at this over the course of five years or even ten years, you may not see the benefit of that, but over the course of decades, which presumably is the investment time horizon of most individuals that are allocating their capital, unfortunately not the time horizon of their attention or focus, but it is the time horizon that the capital is being allocated. They have that very profound impact on portfolios of smoothing out the rides and not really sacrificing much on returns. But again, it has to take place over longer time periods, because again, you can get these pockets of time where assets perform those standard financial assets, stocks and bonds perform really well in tandem together, like we saw in the decade plus leading up to 2022. But there’s windows of time in which they do not so great. And you want that other stuff within the portfolio. It’s just, you alluded to it before. I mean, the history books are littered with the corpses of those trying to time this perfectly here. I think you have to get there mentally to kind of just surrendering yourself to not knowing what’s going to happen. Like surrender yourself to that. But knowing that, again, taking a wider view of history like that is likely the more prudent approach. And again, it may not lead to the highest return outcomes, but is going to narrow the range of outcomes. And if that is your end goal, and you already talked about before for your client base, but I think with most client bases, you’re looking to diversify and save your, convert your human capital into financial capital. I look at myself personally, or you, our human capital, our future income stream is very much tied to the performance of equity markets. So for me personally, I do own some of that stuff, but I own a lot of other stuff that’s not tied to that at all, or hopefully not tied to that at all, because I don’t want my financial capital doubling down essentially on the same risks. Again, that can work really, really well for extended periods of time. One of my favorite market historians, I guess Jim Grant has equipped that the natural sciences and physical sciences knowledge is linear and in financial markets it’s cyclical. So we keep stepping on the same rigs, we keep learning the same lessons over and over again. There’s always these times where like I mean what if like this could be the time that like trees can grow to the sky? Like it’s probably not, but you know if you want to make that bet.

Patrick Longergan [35:04 – 36:32]: Like yeah, I wish I could remember. There’s a behavioral economics book and I can’t remember if it was thaler or Kahneman, but, but one of them pointed out that, and it could be some other behavioral economists that I’m not remembering. They pointed out that people that got monthly statements underperformed people that got annual statements. And you’re like how could it matter what cycle I get my statements on? And the reason it matters is the annual statement people, they would look at it and go oh cool, I’ve got more money than I had last year. Great, because generally, you know, markets are up over year over year. The monthly statement people, they’d be like uh oh, there’s a problem, I better go fix it, right? And the fixing just broke it, right? Like they were selling low and buying high like consistently instead of just letting the thing sort of go. And I think this goes back to your point on like timeframe and headlines and it can be super tempting to get in the mix and fix it and all we’re doing is breaking it. We’re taking a good strategy and making a bad strategy by trying to like pull the levers. And I really, really love the point on wisdom is cyclical in the financial markets because it’s like we’re constantly trying to argue that, nope, this is the new era, you know, where markets are just going to go to infinity and its not the case. So good. Matt, what else should we talk about in regards to portfolio design, current economic status of the world, and how we sort of defend ourselves against that? Is there anything else we need to touch base on?

Speaker B [36:32 – 37:18]: Matt, I think to that last point you made a thought that came to mind is you need to commit to the philosophy because thats what you believe in and want to implement, not because of whatever is prompting you to do it to your point, like because invariably if you’re being prompted to do something because of some headline or whatever, more often than not it’s probably going to be the wrong thing. And that’s, you know, again, it’s not a knock on novices versus professionals, like professionals oftentimes make the same boneheaded mistakes because we’re all human beings with the same, well, variations on the same quirks and foibles. So if you’re committing to a philosophy and a framework of being diversified, or more diversified, do it as an end unto itself, not in response to some other thing.

Patrick Longergan [37:19 – 38:10]: Yeah, we really don’t want to believe we make emotional decisions. Like, we want to believe that we are rational actors in every decision we make. But I think it’s, especially in the financial markets, when it comes to money, for some reason, we are very emotional. And it can be on either end of the spectrum. I’m emotional. I believe in this one particular stock, or I’m emotional. And I believe that the economic markets are a scam and the stock market, equity markets, that type of thing are a scam. And I’m better off just putting my money in. I don’t know, the bank burying it, cds, I don’t know what. But I think both of those are emotional decisions. I think there’s good data out there that supports wise long term investing. We just don’t like to, you know, anytime that seems, that conventional wisdom seems to be the markets in the short term want to seem like it’s proved wrong.

Speaker B [38:10 – 39:04]: Yeah, I mean, it’s almost like, I mean, financial markets are almost like a Rorschach test of your own emotions or whatever you’re bringing to the table. And the problem is you can find an isolated example of anything you want, really. Like, you know, you can find the Amazon or the outlier case of like, well, if I just hold on to this stock, like I’m going to be rich. Like, you can find that example. And, you know, there have been an exceedingly small number of individuals, but individuals that have had, you know, success from pursuing that. And you can find anything in between, you know, to your example of like, you know, the stock market’s a scam. Like, there have been major developed countries where the stock markets have gone to zero. Like, that has happened. But like, again, if you look at the span of history, like, and there’s been a lot of research on, you know, kind of long term historical averages from global stock markets and, you know, it’s pretty consistent that like, you can expect somewhere on the order of like 6% real returns and like, it doesn’t seem great. But if you compound that over a long time, like, the results are pretty, pretty profound. So.

Patrick Longergan [39:04 – 40:04]: Yeah, absolutely. And I think you bring up an interesting point because we can look at companies like Apple that have been around for a long time and theyre on this really fantastic trajectory. If we rewind 25 years, we could look at GE as one of those companies and maybe even go back 15 years and GE was on this. Jack Welch was sort of the genius that ran GE. And if we werent one or two in a sector, we were getting out of it and GE was almost untouchable. Now, if you own GE for the last 15 years, youve had a problem. It has not been a stock that has performed really well. And its like, I, I think we need to keep some of those examples in mind and go, okay, again, back to your point on diversification. We can come up with high degree of certainty outcomes when we’re properly diversified, where if we’re holding an individual position or making big bets on a current sector, something along those lines, it can throw all sorts of deviation into our outcomes and be really hard to plan for. That so good.

Speaker B [40:04 – 40:44]: Yeah, maybe one of the things that kind of came to mind as we maybe segue to the end of the world type topics is, you know, I think making a decision of whether you want to optimize for resilience or efficiency and best outcomes. Again, another important decision to make. If you are optimizing towards resilience, that means you’re not going all in on black. That’s not a resilient strategy. There’s been some research out recently as well that suggests that I can’t remember the exact number, but the vast majority of stocks underperform. The vast majority of stocks like the outliers, really do drive the outcomes. But it’s a bit hubristic to suggest that you’re going to pick the next outlier.

Patrick Longergan [40:44 – 41:46]: Let’s just say, yeah, that’s fantastic. So Matt, I’m going to make a statement and I’m going to let you beat up on it here. I’m going to argue that all of these demographic issues, geopolitical issues, like societally, we’re really good at solving these slow moving catastrophes that are coming at us. I’m going to use the example of y two k. It’s like, hey, we saw this thing. We’re concerned that, you know, the power grid and everything was going to just stop functioning in year 2000. And it was sort of a doomsday scenario. And we went, oh, okay, this is a slow moving catastrophe. We figured it out and 99 rolled around and 2000 came and the lights didn’t shut off. I remember I was watching the tv sort of waiting for it all to just like go black. And it didn’t. And so now it was a big tube tv. It wasn’t one of those flat screen fancy ones that we have nowadays. But yes, I think we can probably head off some of these problems that are coming and we’ll keep moving up and to the right. Maybe not in a totally smooth line, but I have faith in society to figure that out. So do you have any thoughts or comments on that?

Speaker B [41:46 – 42:19]: Yeah, a whole host of them. But let me try and narrow the focus here. I think I mentioned before we started recording, like, I consider myself maybe short to intermediate term pessimistic and long term optimistic. I think I generally agree with kind of this consent, the view that the arc of human progress is upward. But I do think there is a lot more volatility around that than, you know, people, at least historically. Like, I do fancy myself a history buff, I guess a dilettante historian.

Patrick Longergan [42:19 – 42:26]: I am a little disappointed you’re not wearing, like, the tweed jacket team we got. I think you should.

Speaker B [42:26 – 42:29]: I can take a picture, and that could be the headshot for.

Patrick Longergan [42:29 – 42:30]: Yeah, yeah.

Speaker B [42:30 – 42:31]: For the podcast at the very least.

Patrick Longergan [42:31 – 42:32]: Least.

Speaker B [42:32 – 44:47]: So I think there can and often has been a lot of volatility around that upward arrow of progress. And, you know, another distinction that I would make, maybe in your statement would be we all have biases. My bias is that I believe markets work, broadly speaking, and I think markets solve problems. You already alluded to the case of some central planning folly in the case of China. Like, I don’t think top down planning really often works out too well in terms of solving these big problems and to the degree to which we kind of lose that dynamism, I fear that there are risks of us not being able to solve some of these big challenges. I mean, I don’t think we’re so far gone that that’s an acute concern in the here and now. But, like, the rate of change isn’t great, I would say personally over the last handful of decades. So I think that is something to be cognizant of and a potential concern in terms of solving some of these issues. Again, I think you mentioned demographics, for example. Potentially this boom in AI, productivity and robotics could go a long way to solving some of those demographic issues that probably weren’t on people’s radar because demographics is a very, very slow moving factor when it comes to investing in economics. A lot of people have been talking about this demographic clip for going on decades in the case of the developed world and China as well. But, you know, for most of them, AI robots probably wasn’t on the bingo card of like how we, how we solved that. And there’s a realistic possibility that that could be the case. So I do generally agree that markets do find ways of solving these problems, but I do have fears that we are degrading that in the west and it’s non existent in the east. Again, I personally am of the view that this idea that China’s playing go and we’re playing checkers, like, I don’t fully buy into that. You know, again, again, one child policy and several other of their kind of marquee policies over the last decade, the COVID lockdowns is potentially another glaring example. So I don’t buy into that, which then that presents its own kind of geopolitical risk and economic risks as well. And given the intertwinement of commerce, China being the industrial and production base of basically the whole global economy. So that certainly raises some challenges.

Patrick Longergan [44:47 – 45:29]: Yeah. And just to add to the chime in piece, like Peter Zion Zaihan, however you say his name, highlighted a point that China’s economic policy, how they print money and they will just to keep people employed, they will just keep funding projects that actually don’t make any sense. But it’s like they’re just propping the economic system of China up by keeping people working, by printing more money and shoving it into strategies. It’s like, that feels like a losing strategy to me long term. And it’s like, like people that are concerned about the dollar coming off of being the reserve currency, I’m just like, I don’t see anybody that’s taking it over. It’s definitely not China. So I don’t know. I think that’s just an interesting factor too, that I don’t feel like they’re playing go and we’re playing checkers.

Speaker B [45:29 – 45:49]: Yeah. I have probably a whole soapbox that I won’t get into on why I think GDP is not the best indicator of success because there’s no element of what, of that GDP is productive. And if you give me a credit card and allow me to spend, I can create a lot of demand. It could create a lot of growth. But the bill comes due potentially at some point.

Patrick Longergan [45:49 – 46:30]: Yeah. So I don’t want to get too far down this route. But you look at, I don’t know, major civilizations. Right? Like, is there this thought that the United States is sort of like been the world superpower and we’re going to like fall off that mantle and go back into pre industrial age like and sort of be, you know, farming our own crops and that type of thing. Is that anything that is on anybody’s radars or any. Again, just looking at cycles and going, you know, time we saw Rome is now reduced down to a tiny fraction of what it was. We see a lot of the great empires have sort of fallen after a few hundred years, and so are we in that cycle here in the United States, and should that be something we’re worried about?

Speaker B [46:33 – 48:43]: Yeah, I mean, I think a lot of people are, again, probably an element of the zeitgeist that you were speaking to before. I think this is kind of intertwined in that or bound up in that. You know, I think there has been some, at the very least, interesting conversations and research around that. Probably most notably, Ray Dalio recently published a book, Ray Dalio of hedge Fund fame, one of the largest and arguably more successful hedge funds, at least in terms of accruing assets. Maybe not in terms of the net results, but accruing assets certainly wrote a book on the changing world order and studying currency and cycles of empire or global hegemons. I think there’s some. Again, I think the rate of change within the US is concerning. Like, it’s probably not happening tomorrow and it’s probably not irreversible either. But, you know, I think it’s something to be, well, maybe not cognizant of, if you’re a nerd that’s into this stuff, maybe something to be cognizant of and kick around, you know, in terms of, you know, getting back to the thrust of the conversation. Like, I do think that’s where the diversification comes into play as well. But I think the people that completely just miss it out of hand are perhaps a bit premature. And I think the framing of the dichotomy of, like, if this, then that, like, if that comes to pass, then we revert to an agrarian state. Like, you know, the last I checked, the UK didn’t descend into the ocean after they ceased being the global hegemon. Neither did Netherlands before that, or Spain and France before that. Portugal, Rome, all these places still exist. Life does go on. But. But these major resets do occur from time to time. I mean, even in the window of us being the global hegemon, we had the great Depression and World War two, and then the Bretton woods agreement was really kind of what set the economic rules of the game that was then reset in 1971 with Nixon closing the gold window and us being in this floating exchange fiat currency regime that we’re in currently. And I’m. If history is any indication that will change again at some point and maybe not in the too distant future, but it also doesn’t mean that life will cease as we know it either.

Patrick Longergan [48:43 – 49:03]: Yeah there’s another book, the creature of Jekyll island that talks about what happens when we go off the gold standard. And it paints a pretty dire picture. And again, it’s interesting, sort of makes you want to take all of your assets and put them into gold, a silver something along those lines. And it’s like, well like we talked about, if that doesnt come to pass, thats a real problem.

Speaker B [49:03 – 49:10]: And so again, knowing something versus knowing nothing. Like the answer is probably own some, not own all.

Patrick Longergan [49:10 – 50:10]: Yes. Yeah good. So I think another area that is maybe concerning its like climate change, we can measure that the worlds getting hotter. Theres some interesting data. I live in the midwest thats actually benefiting us in the Midwest. Its sort of smoothing out our temperatures throughout the day. You know, were not having these cold frost freezes at night. And so it allows our crops to perform better, which is actually a good thing. But we can then see some of these wildfires raging that are just decimating Australia and Canada and it’s problematic. So is climate change something that is going to be a piece of this puzzle that we need to take into consideration? And we think about that there’s sustainable energy resources, there’s oil, there’s fossil fuels. How all that coal fits into this discussion as well. It’s like because I could push all my chips into solar farms, I guess. And I think that’s going to be the way we’re going to solve this problem. But yeah. Any thoughts on how climate change affects my investment strategy?

Speaker B [50:10 – 52:20]: Yeah, a couple kind of, maybe more, more macro and then to the practical, I think, you know, again, revealing my bias here. I think solutions that are driven from the bottom up and by the market will be better than those that are top down. In the topic of this whole conversation that everything that we’re talking about here, resilience versus efficiency, for example, I think a lot of the sacrifices at the altar of efficiency and this green transition has caused two steps backward in much of Europe as a result of the geopolitical concerns that are front and center. We’re now firing up coal plants. That seems to be moving in the wrong direction of what we’re trying here. And as a result of using less economically viable potentially technologies and particularly in areas that are ill suited for it, like solar farms in Germany. Probably not the best idea if you don’t have a ton of sun throughout the year. So again, I think market based solutions, hopefully, I think, will resolve this. I do think we’ll resolve this over the long term. I guess the question is how long do we forestall those solutions coming to the fore? This kind of gets back to another point I wanted to make as well. Like, you know, all of the stuff that we’re talking about, all of this is volatility we’ve been talking about. And in a market based system, volatility is not a bad thing. That is the mechanism through which we learn and improve. You know, the economist Joseph Schumpeter called it creative destruction. Like, through that volatility, you know, in the ashes of that, that is where the new technology and new ideas come from. So, so again, going back to my concerns is like, I think the concern is the tamping down of that volatility. We should not be afraid of the volatility. We want that recession. We want the recession because that clears out the underbrush. Fearing that is the wrong fear. The fear should be that we continue to take measures to try and prevent this short term pain for no reason. In essence, I think going back to the climate change specifically, the longer we, we forestall market based solutions, I think the more painful the transition can be. But I do think we’ll get there.

Patrick Longergan [52:20 – 53:20]: Yeah. And again, we could probably do a whole episode on this, but I look at bailing out some of the banks, I look at all of the printing of the money during COVID and yes, absolutely would have caused pain for people if those things didn’t happen. But I think we would have cleaned up some messes, that unhealthy businesses would have gone away. There would have been an example to point to, like, hey, these are bad banking practices. Dont do that. It puts you out of business. And instead, what I think its done is almost incentivized the too big to fail side of things and made the regulation on the small banks so burdensome that all they can do is consolidate because it just doesnt make sense on their scale. So again, we could probably get down a whole rabbit trail there. But I feel like we miss out. Government being involved is cleaning out some of the underbrush side of things. And I think what it may be doing, we’ll find out, is like kicking the can down the road and we end up with a bigger, more painful drop off than we would have had if we just would have had some bumps along the way.

Speaker B [53:20 – 53:59]: Yeah, and I think maybe that is part of the palatable concern that people have, is hopefully it’s not some like, psychological quirk in which, like, we can’t have success. Like, we don’t. It’s just too good. Like, we don’t deserve this. Like, I think part of it is perhaps that undercurrent of knowing that there were some measures taken to get us here and there may be a pound of flesh exacted for those measures at some point. Again, remains to be seen. I think we’re experiencing some of them. In the case of like, having a 9% plus year on year rated change of inflation in 22, 40 year high in inflation, I think that was in no small part an element of that. But I mean, hopefully we’re out of the woods, but remains to be seen.

Patrick Longergan [53:59 – 54:12]: Good. So, Matt, what else do we need to talk about if we’re worried about the end of the world as we know it and sort of constructing our financial lives in a way that keeps us safe? We’ve covered a lot of ground, but I want to make sure that there’s anything else we touch on that.

Speaker B [54:13 – 55:42]: Yeah, I think so. I mean, starting with that kind of understanding of your philosophy, and I think understanding what you as an individual want to prepare for. I mean, if you do kind of have the concerns of those more extreme outcomes, like, not to dissuade someone from making those preparations, but there’s probably a point at which you have enough canned goods in the bunker. And then beyond that, maybe you want to consider allocating two assets that can offset that position should you be found to be in error of hunkering down for the storm that did not come to pass. But I think it starts with, what do you want to prepare for? What trade offs are you willing to make in service of that? And what are the consequences of your being wrong? And I think for most people, moving more towards a position of knowing nothing is probably the better outcome. Like, don’t completely dismiss that. Like, know that you have things in your portfolio that can do well should that come to pass, be it gold, real estate, whatever the case may be, have some things that are going to perform well in that environment. Like, I don’t think there’s anything wrong with that, particularly because, like, it doesn’t need to be that environment for them to do well in a portfolio as well. We’ve seen numerous times in the last two decades where gold can be a powerful diversifier within a portfolio. Real estate can be a powerful diversifier. Come on. Whatever the case may be. So don’t not own those things, but temper that and counterbalance it with. Have the humility to know that you cannot perfectly predict the future and let’s counterbalance the risk of being wrong.

Patrick Longergan [55:42 – 56:12]: I love that. And I think that fits just nicely in the investment policy statement. Let’s design something that takes all of these things into consideration. Time horizon emotions and biases. And then do I know something or do I know nothing? Or am I somewhere in between and want to have some of that built into my portfolio design? Because I think if not our emotions, whether we like to admit it or not, are going to dictate our decision making. And we can see how that doesn’t work out for people in the long term. That’s not a good strategy.

Speaker B [56:12 – 56:52]: One other thing on the knowing something as well, because I think we all get that wild hair from time to time. So I think it’s, it’s important to kind of ring fence that as well. Like if you do at times think you know something, you know, it might not be imprudent to carve out a small portion of the total to express that, but, you know, again, thinking through that, like, you not only have to be right, but the market has to be mispricing that and you have to choose the correct instrument. So, like, thinking through all those stages, I think is important with any of these things we’re talking about. Like, if you think you have some edge on climate change or geopolitical risk, like think through all the phases and ring fence that so that if that doesn’t come to pass, you know, you’re not going to be detrimentally impacted.

Patrick Longergan [56:52 – 57:25]: That’s a great point. And we just had a conversation before we hopped on this call with a client where we were carving off a piece of their portfolio because they were like, I like what you do for me. I like that you created a margin of safety and can give me a certain degree of certainty in the outcomes. But I like the control piece of this whole thing. I like being able to make some bets and they sort of acknowledge that it’s not that different than going to the casino. Like, I might be completely wrong. I’ve had misses in the past. I like having a piece of my portfolio that is just there for me to play with and pretend like I know something.

Speaker B [57:25 – 57:31]: Yeah. And it’s not necessarily efficient, but it is resilient if that allows you to not hijack the rest of it.

Patrick Longergan [57:31 – 58:10]: Exactly. Yeah. No, Matt, this has been fantastic. I appreciate you diving down the rabbit hole in all these different areas of how our economic, political, societal systems could fall apart and how to protect ourselves from that. I guess at the end of the day, there is no protecting us if it all just evaporates. But if that’s the case, yeah, none of these things really mattered anyway. But I don’t think that’s happening as we’ve discussed, like there’s going to be some volatility. I think that’s good and I think we need to have a diversified portfolio that puts some alternatives in there that is going to help us smooth out the ride. So I do appreciate your wisdom. I appreciate how you help our clients on the portfolio design side of things, and this has been really good. Thank you so much.

Speaker B [58:10 – 58:13]: Yeah, happy to lend what little wisdom I have.

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