Financial Advisor Nick Murray: Masters in Business (Audio)

written have titles like Simple Wealth, Inevitable Wealth. He is an extremely insightful person who has been working in the financial services industry for nearly half a century. He began his career early on you'll hear at a number of well known brokerage firms, and found himself more and more offering advice to other advisors and brokers rather too specific individual clients, and that evolved, as he discusses, some thirty plus years ago, into a full time career working as

an advisor to advisors. He has a very substantial and loyal following amongst a certain group of people in the financial industry. He preaches some very common sense things that are a little counterintuitive. You might be surprised to learn how important stock picking and market timing is to long term returns. Uh. The answer is going to rock you back on your heels. All those things matter much, much less than your own behavior as an investor and your

own behavior as a financial advisor or broker. One of the things I find really fascinating about Nick Murray is that the average person has no idea who this guy is. In fact, I would go so far as to say the average investor has no idea that there is an industry that exists helping advisors do their job. And I don't just mean software and various mutual fund managers and product creators, but someone who actually facilitates the process of the ideal way, the optimal way for financial advisors to

interact with their clients. A lot of this is kind of inside baseball. I suspect we're gonna have a lot of people in the financial services industry finding about out about this and listening to it. He speaks all over the country, probably gives fifty plus speeches a year, and commands a i um speaking fee because he is in such demands. UH. For those of you who want to know a little more about how the financial services industry works, or those of you who are just interested in the

work that he does. Here is Nick Murray. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My guest today is Nick Murray. You may not know who he is, but if you're in the financial services industry, you probably should. He is known as the Advisers Advisors, one of the industry's premier resources for registered investment advisors

and others. He is the author of eleven books for financial services professional, most famously Simple Wealth Inevitable Wealth, which has been described as the most successful privately published book of the last fifteen years. In two thousand and seven, Nick was the recipient of the Malcolm S. Forbes Public Awareness Award for Excellence in advancing Financial Understanding. Nick, welcome

to Bloomberg. It's very nice to be here. I would point out that I've never claimed that Simple Wealth was anything but one of the most successful privately published books of the last fifteen years. We don't want to start hyperbole this early in the Okay, we'll save it for the latter second hyperbole in segment five. A. Alright, so a little bit about your background. You went to Columbia

years and years. I went to Columbia seven years of college wasted, just like Bluto, seven years of college down the drain um, but always not lost because my major was economics, and of course in the mid nineteen sixties they were teaching Kanzie and economics still do, which I would have had to go back and re learn all over again anyway. So it wasn't, as we say, a

total loss. Okay. So so you come out of school in nineteen sixty seven, you go to E. F. Hutton and then you're at Shearson, ultimately ending up at Bear Stearns before saying to yourself, I'm in demand by advisors more so than anything else. Maybe that's the sort of area I should focus my attention on. How how did that transit? It was kind of it was kind of

a half step. In nineteen um years ago, about twenty five years ago, now that you mentioned it, and now that you mentioned it, in August, I published the book called UM Serious Money, The Art of Marketing Mutual Funds UM because there was no other book on the subject, and you know, started to get a lot of requests to to come to firms other than Bear sterns and talk about this, and I it was just a collision course and so I kind of took myself off was

an independent advisor, UM and also doing this whatever it is that I do now, and then at the end of the decade, at the turn of the century, I kind of said both, Yeah, you better do one or the other. So let me ask you a question. I've heard other people ask this, and I actually rarely asked this question, but for someone like yourself, it's a fascinating way to frame this. When people ask you what do you do? You know it's typical cocktail party chat or

how do you answer that question? I say that I'm an advisor to other financial advisors, that I was for a quarter of a century or more a financial advisor, and now that I consult and and speak and write to other financial advisors. And if they don't go to completely to sleep, well, I'm still saying that. I just kind of walk away. That's UM. I find myself in an odd situation When people ask me what do I do? The answer is always, well, what day you I It's not like I have a nine to five. I can't

just say I'm an accountant or a doctor. It's much more complicated, and once you see that glaze over the eyes, it's like, all right, I think I'm I'm boring them to death. My attitude is that's what you get for asking me. That's right. So so from the financial services industry as an advisor to actually helping advisors help their own clients. You know, what was the motivational drive of that? How did that come about? That? Was it strictly due

to demand from advisors? What what makes you say? You know, I have a bunch of clients and I like them, but these other advisors they're they're kicking my door down. How do you make that transition? Well, first of all, a lot of it's just getting older and making choices. I mean, it's just you know, there come there came a point where I didn't think that I could do both with distinction. You couldn't be an advisor to clients and an advisor to traveling all over the country and

writing in and doing all this other stuff. You speak frequently. How many events do you speak out a year? I guess it's running around four dozen. All right, so almost weekly you're on the road somewhere. It bunches, but yes, it averages out to once a week, and you have about thirty subscribers to your newsletter. And what I want to point out about your newsletter, Unlike just about every other newsletter I've ever seen, yours is described as having

zero forecasts. Explain that, Um, it's funny. Nobody has ever said that. I don't know anything about other newsletters, and nobody's ever said that to me before. But I'll take you at your word. I UM, I don't know how anybody who's a counselor to advisors who are trying to get their clients to think and act long term would sully himself with a with a forecast of any kind. I think could just Hey, I'm not qualified to forecast. This doesn't bother me because no one else is either.

That was my next question. So you don't think that the gold is going to five thousand this year? Is that we are at some point? It is at some point? But is that February? Is that Novary? When? Because that's my favorite forecast I've I've seen that for now for ten years. Gold goes up, gold goes down. The forecast never changes. My favorite forecast is DW five thousand, which you see about every ninety days from someone or other. I'm Barry Ridhults. You're listening to Masters in Business on

Bloomberg Radio. My special guest today is Nick Murray. He is the advisor to Advisors. And one of the things that I really like about UM your various writings, especially your regular newsletter, is your emphasis on out performance and why we obsessively focus on it to our debt from it. Describe that if you would well, it covers a lot of ground. I mean it kind of depends on what you mean by out performance, if you mean alpha. Jore. My attitude is forget it. The the individual investor struggling

with everything else. He's got a struggle in his life and and trying to make sense out of his long term investments. The best way and the easiest way, in the most fatal way that he can blow himself up and will blow himself up, is chasing alpha. Is mistaking out performance for a financial goal, which is not the great task of the individual investment advisor. To me and and particularly the holistic financial planner is keeping everybody on their long term plan. And I think you can do

one or the other. You can sort of follow a plan or you can chase performance, but I don't think you can do both at the same time. One or the other will will take you over. And if alpha takes you over as opposed to outcomes, I think you're dead in the marketplace. So I have a few quotes of yours that I want to throw at you and have you, um respond to, one of which was investor behavior is far more important a determinant to someone's returns

than either stock picking or market timing. Explain that I don't know that I ever said that, Um, Then no, no, But here's what what I've said is even stronger than that, which is word for word, the dominant determinant of long term, real life financial outcomes is not investment performance, it's invest or behavior. So so let's let's explore that a little bit. So the total arns that a person is getting from their portfolio matters less than what they do in response

to various inputs. Is that a fair way to describe that? How How if at all they respond inappropriately to market stimuli. So give us a few examples of inappropriate responses you have of your portfolio and dot com. And we saw plenty of that, And we saw plenty of that and you have of your portfolio in gold and cash. In the spring of two thousand and nine, and we certainly saw a lot of people panicking out of the market in March o nine it was ever thus and and

that's pretty much human behavior. There's not a whole lot of that's that's fairly perennial or or everlasting. That's the nature of how people react, isn't it. That's why the financial adviser was sent into the world by God, because it is essential to human nature. The the financial advisor doesn't manage money, he manages people. And again this is

an either or choice. You you every advisor has to comes to that fork in the road, I think, and the good ones go down the road of of managing investor behavior and sort of letting the portfolio as as long as it's allocated to the right stuff in the long run, leaving the portfolio alone. I'm I'm a firm believer. This is a slightly different point, but it seems to want to come up. I'm a firm believer that the more often you change the portfolio for whatever reason, the

lower your return will go. That turnover is absolutely correlated negatively too to return the way I heard that some years ago was don't just do something? Sit there very much, so I think it was Lewis rukais his last words. So there is um. You've written many books, one of which I have right here called Behavioral Investment Counseling, and there is there is a section in it that has some information that I had a double check because it

was so outrageous when you first read it. You you have to say, let me make sure this is true.

So I'm gonna read this data over twenty years, the average large cap equity mutual funds, and this is as of oh seven, so it's before the crisis and before the recovery, the average large cap mutual equity mutual funds, according to Lipper Analytics, has returned ten point eight one but the average investor in those funds have received only four point four eight percent of those In other words, they're retaining less than half of the gains of the

funds they own. How is it possible to underperform your own investments by buying them and selling them at the wrong times? And how those data which which you're quoting from the book. That study is done every year and every year it comes out the same there's been no change post crisis, post recovery. By the way, the second number is from dal Bar, which actually dal Bar does

the study. And that's my point that if you read the twenty annual dal Bar studies, they basically cluster around the same conclusion, which is that the average investor blows about half the return of either the market or the average fund. And that's not through picking this fund over that fund. It's through their own behavior, switching funds, switching from here to that. So they sell something at the

wrong time and swap into something at the wrong time. Well, well sure, because what they do, what what I think everybody is inclined to do, is switch out of something that's gone cold into something that appears to be hot, and and again. I think that's a very fundamental human behavior. And if you stop for ten seconds, you realize that what they're doing again and again and again is selling low to buy high, which I read somewhere is about

the opposite of what you're supposed to do. I think I've seen that as well, and it just it can have no other outcome, So mean reversion not really something that the average investor is thinking about. In other words, buying something that's dipped and selling something that's rallied, they're doing the opposite. They're left to their own devices that they're they're doing the opposite, which is why, in my experience, almost all of the great advisors are rebalancing annually. Hey,

they're coming back to the original plan. But in the act of rebalancing, what you're doing is kicking out stuff that shot out the lights and redeploying it into stuff that's just waiting to go instead of the opposite, which is what everybody does if you leave them to their own device, And the research shows that's the closest thing to a free lunch on Wall Street. There's no risk, no cost, and you're actually adding a few basis points of performance over a long time. Total no brainer. You're

listening to Masters in Business on Bloomberg Radio. My special guest today is Nick Murray. He is the author of eleven books on investing and how advisors should interact with clients. Let's talk a little bit about that. So, so you began in ninety seven. What was the role of the advisor back then? Was that a very different era or was it just the same thing? It was the it

was the neanderthal he it was. It was stockpicking still just in seven, which was very very close to as you know, the top of the great post World War two bullmarket twenty years nifty fifty. Everybody was all excited and then had really become a garbage market, really become a garbage market. And it was it was really the first great outbreak of mass uh performance mania since the twenties, and no one had an adult memory of that, and

no one knew what it was about. And the market had been going up for you know, two years, yeah, and and it was it was allegedly a stock pickers market. It was all about beating the market by individual stock selection. Heaven helpless and and around the same time, you know,

you stop and think back to it. Yeah, you had these short little recessions in these short little market corrections in the fifties and early sixties, But overall, the long term returns for most of people's adult life at that point had been a one way trade, hadn't it be? And And so that was doubt kissed a thousand and nineteen sixty it did, and it wasn't over it on

a permanent basis again until that is exactly correct. So, so how does somebody how does an advisor counsel clients three, four or five years into that it looks like the market is never going up again? Well, I hope that um an advisor is counseling clients to be buying with both hands, because that's when, that's when you're supposed to Now, isn't what a lot of people do. I don't think

it is. But the narrow answer to the narrow question what should a what should an advisor be counseling people in a period like that, is is a continue to work your plan, be you're getting some kind of a big intermediate to longer term sale. You'll never see these

prices again. You had to know, uh, you know, nine seventy four when the when the the pe was eight or something, because the bonds were risk free and the market had just fallen fifty from So so let me So you said that was a narrow question, let me

ask this in a more general, broad set question. What makes a successful financial advisor somebody who can make a plan for his clients empathetically, bravely, smartly and keep them on it and regardless of the fads or fears of the moment, regardless of the fads or fears of the moment. This brings us back to the behavioral issue. How significant is what an advisor does in terms of managing the

poor impulses and emotional instincts of the average investor. Again, that's what I think he was sent into the world to do. So now let's let me ask you a somewhat different question about that. What's the ideal client? Like, So you just described what the role of the advisor is.

What's the role of the client in all this? The role of the client is to come to an advisor, realizing that he cannot make for himself a lifetime much less multi generational investment plan, much less financial plan, and find an advisor that he can trust, and sit down with that advisor and make that plan and ask the advisor to keep him on it even when he doesn't want to stay on it. That's what the ideal client is. It's somebody who I'm not going to tell my lawyer

how to defend me. I'm not going to tell my accountant how to do my taxes, and I'm sure I'm not going to tell my doctor what to prescribe on what theory if you think that's rational. Does someone go to an investment advisor, much less a financial planner, and say, this is what I want to do. You go to a planet because you don't know what you want to do, or you suspect that what you want to do is wrong because you've tried it a bunch of times and

it hasn't worked. So that's to me. The ideal client is the one who treats his financial planner the way he does his attorney and his accountant and his doctor. He goes and says, as nearly as I can tell, this is my problem, tell me how to fix it. That makes plenty sense. What about the client who goes to an advisor and says, I just saw this guy on TV and here's what he said. How should that be handled? If you think he's right, go do what

he said. I'm Barry. What helps? You're listening to Master's in Business Bloomberg Radio. My special guest today is Nick Murray. He is the advisor to advisors and has spent the better part of his adult lifetime trying to teach advisors the proper way of interacting with their clients. And just before the break, we were discussing a very typical error that advisors make, which is placating clients when they're engaging

in bad behavior. Discuss what what the problem is with that? Well, the problem is that you're taking money from people in exchange for enabling them to do things that you know are wrong. Hey, I think that's immoral. Be I don't know how you look at yourself in the mirror and see all you're doing is postponing the inevitable. If you're helping people do the bad things that they want to do, you're you're that's going to be a train wreck eventually. And when it is a train wreck, they'll turn around

and blame you. I've seen it happen any number of times where where advisors, you know, kept trying to get the client on this on the straight and narrow, said Okay, I'll let him do this, I'll let him buy gold, I'll let him go to cash this, that and the other thing, because he saw the only alternative as losing the account, which he didn't realize what was what he really wanted. And and when the client hit the wall, he turned around and sued. The guy sued the advisor.

So so let's back up and I know you're talking metaphorically and not any specific account, but you're a big advocate of where there's not a good fit between a client and an advisor, to terminate that relationship or fire

the client. I'm I'm not actually, I'm I'm a big fan of not starting the relationship because you know in the first twenty minutes, so you should never get I don't think an advisor in a per efect world, and I know this is not a perfect world, but I don't think that the advisor should ever get to the point where he's gotta fire a guy because he knows he knew going in, you're going in. This is a

absolutely in the first twenty minutes. So what happens in the real world where you think you're sympatico, you're you're you know, especially if you're not promoting yourself as a Look, I'm not a stock picker, I'm not a market time or I'm a long term asset allocator, even with the best of intentions, and where you think there's a fit when you're six or seven years into a long term bull market and people forget how they their buddies panicked out in the in the bottom you know, you look

at their tenure returns. They're doing much much better than the guy who's chasing returns at the top and panicking out at the bottom. And now this guy discovers the next great thing, gold nanotechnology, Netflix, Facebook, you, you name it, whatever it is. How how do you deal with the client who suddenly says, hey, listen, I'd like to juice my returns. My neighbor told me that he bought the Facebook I p O and it's now almost a hundred. Why don't you get me the Facebook ip O. That's

a real world behavior. It's a very real world behavior. So what's how should that be handled? How should that be dealt with? I don't do individual stocks. I have no understanding of Facebook's business model. In my own defense, I don't think Warren Buffett does either. But I don't want to. I don't want to do, you know, um, anything by association. This is not a part of our plan. This is not something that I would feel competent to

advise you on. I'm not going to do that. If you if you want to take some money, um, that is not essential to your long term plan and play with it by all means, you know, be encouraged to do that elsewhere. So you're a fan of the um an account that acts as an emotional release so they don't mess up their long term money. But here's a small amount of money that if you lose it, it's

it's who cast. If that's the only way that you can keep him from coming up the long term plan, sure, and what about people who are just hell bent on self destruction? Terminate that relationship again again. I think that if you've been in the business for any length of time and you're honest with yourself, and you're not just looking at and saying, boy, this is a really big account, and I hope I get it, and I'll say whatever

I have to say to get it. If you're honest with yourself, you know in the first twenty minutes you people who are seriously bent on self destruction confess that to you without realizing they're doing it very very early in the game, long before you're you're deep into the weeds. We we have a couple of cfps in our office and they have a list of knockout indicators, and it's when we start when people start asking questions about sharp ratios and things like that. We know, hey, you really

want a hedge fund. You're not looking for a long term financial plan. You want a whole lot more juice, and and that's not what we do. We're really boring. You want you want a whole lot more cocktail party chatter. And uh, it's amazing how many of those sort of knockout indicators pop up. And you're absolutely right, it's in the first ten minutes of the conversation. So so let's talk a little bit about risk and reward, all right, because risk is something that a lot of people have

a tendency to think about, sometimes incorrectly. Um, how should retail investors think about risk? They should define it, first of all. And retail investors can't the retail investor, and this is a huge part of his his problem and his desperate need for an advisor. The the individual investor cannot distinguish between risk and volatility. I was gonna say, if everybody uses volatility as a proxy, but volatility really is not risk. Volatility has nothing to do with risk.

Risk is the chance of a permanent loss of capital. Volatility is unpredictability, both high and low around a long term trend line. One thing with the other got absolutely nothing to do. And this is far out breaking news for the American individual investor. Why does anybody get out at the bottom of the market because he looks at a temporary decline, because they're all temporary declines, and he says I have lost ex per cent of my money. In fact, he has not lost anything unless and until

he sells. This is a distinction that in my experience, people cannot make without an advisor, basically standing athwart their portfolio, go and stop. Don't do that. We're speaking with Nick Murray. He is the author of eleven different books on finance and an advisor to the advisor community. So let's go over some of the worst mistakes that investors make. You hinted at a few of them. They end up getting enamored by things like I P O S. They get

aggressive at the top, they panic at the bottom. Really, a lot of this just comes down to emotions, doesn't it. Sure, it all comes down to emotions. They give into emotions, they get excited, they get enthusiastic, or they get terrified. Um where they get greedy. So let's talk a little bit about greed. What what about private equity and venture investing and hedge funds. They sound so sexy and sophisticated. We've been anecdotally hearing more and more question is about

that from different people. What what are your thoughts on on those areas of investment. I have really studied those areas. But if you find one that has outperformed mainstream equities over the long term with anything remotely like the volatility of mainstream equities, I'll be interested to learn about it.

I haven't found one yet. Um, the things that you're talking about, basically are very subject, in my experience, to vogues, And so you know, you would you would have you would go into the crash of two thousand seven, two thousand and nine with maybe two hundred million, two hundred and fifty million dollars in total in in commodity futures funds, and you would come out of the crash with two and a half billion because momentarily that stuff had held

up better than mainstream equities. So what did everybody do? They took all of their money out of mainstream equities somewhere near the bottom and invested it in whatever you call these things, futures managed futures. I don't even know the terminology at at at a time when there was so much money coming into these things that they could not possibly perform, and and it was ever Thus so

I you know, I don't manage money today. But if somebody came to me and said I want to put a third of my money in managed futures and and private equity and all this other stuff that you that you mentioned, I would say, these are not areas that I know anything about. They're not areas that I'm interested in knowing anything about. Deep down, without adopting the you of the burdener proof, I suggest to you that I have never seen evidence that these things consistently outperform mainstream

equities over the long term. But it is your money, and you're the client, and you should go find somebody who is good at, or you think is good at counseling you in in these areas, because I will never be We've been speaking with Nick Murray. He is the author of eleven separate books on investing and well known as an advisor to advisers. If you enjoy this conversation, be sure and check out our podcast extras, where we

keep the tape rolling and continue our conversation. Be sure and check out my daily column on Bloomberg View dot com. Follow me on Twitter at Ridhults. You can see Nick Murray's writings and subscribe to his newsletters at either Nick Murray dot com or Nick Murray Newsletters dot com. I'm Barry Ridhults. You're listening to Masters in Business. I'm Bloomberg Radio. Welcome to the podcast portion of our show. Our special guest today, Nick Murray. Who this is a little inside baseball.

If you're a registered investment advisor or if you work in asset management, you probably have heard the name Nick Murray. UH. For for you civilians out there who may not know the name UM, he is the person who is essentially helping advisors help you and has a legendary history and the legendary UH following amongst the advisor community. And if I haven't said this previously, Nick, thank you so much

for doing this. It was a pleasure UM inviting you, and I've been reading you for a long time and I'm certainly familiar, um with a number of your books, some of which I actually brought with me for you to sign. I will be happy to do that. Thank you for the opportunity to have the conversation. So, so let's talk a little bit about some of the things that you So we have no time constraints here, so

don't feel like you have to give me short broadcast answers. Um. That's the whole beauty of this is that we can sort of wax eloquent as long as long as you like. Um. Before we were talking a little bit about risk, and some of the questions I didn't get to, but we hinted at. So, so the flip side of risk is reward. What is it about reward that makes investors lose their minds?

How is it that you know, in the midst of a downturn you see one type of investor behavior, and then after a market has run up for a couple of years, you start to see another type of investor behavior. I don't know how to answer that other than by copying out to human nature. That's not a cop out.

That's it's it's permanent, it's forever, it's you know. One of my favorite investing books, this this will go right to your point is UM, How I Trade Stocks and Bonds was written in nine four by uh Wykoff is his name, And if you went through this book, and substituted where where he says railroads, you put in airlines, and when he says telephone and telegraph, you put Internet. I defy anybody to tell the difference between that book written almost a century ago, Richard Wykoff's book, and a

book written a year ago. They're almost identical where they'd have to be, because human nature is immutable, if you um.

My favorite book about the Ties and the crash intellectually is more Kleines Rainbow's End, and one of the great beauties of that book is that it came out in two thousand and one, halfway down the great implosion of dot com, and to pick up that book and read about the mania and then the complete collapse at a moment when you were living through a mania and a complete collapse, all you could do uh reading it was to say, I'm watching that movie all over again. It's funny,

I should pick this book up. It's a it's a cliche, but it's true. The one thing we learned from history is that nobody learns anything from history, and that, in my opinion, is why God sent the behavioral investment counselor into the world. So more important than performance, more important than stock picking. Having someone facilitate your emotional well being or prevent you from doing the things that we know people tend to do well, not as an abstraction, but

in service to a plan. So describe that a little bit, because you've you've referenced it in my mind, I know what a plan is, but perhaps someone listens thing is not that clued into what you mean by a financial plan. Well, I'm not sure that I mean anything specific by it.

But what I mean is that you're you're fifty two years old and your wife is fifty two years old, and suddenly you realize you have not saved enough for retirement and you and suddenly you realize that you have said all along, the two of you to each other, sixty two and out. And so one day, you know, you go to sleep one night thinking about the Mercedes and the trip to Europe, and you wake up the next morning saying, we have less than ten years to go. And that's that's kind of a jolt for a lot

of people. And and and believe me, I'm sure you know a lot of people show up in Advisor's offices at the point where they got that jolt. Now, what's what's going to be the next thing that happens. The advisor is going to say, Okay, ten years from now, what is the sum of capital that will produce as some reasonable withdrawal rate that will produce what you need

to live on for the rest of your life. And out of that, you would assume, comes a written date specific, dollar specific retirement accumulation plan, and out of that comes an asset allocation model. What rate of return will it take to get you from where we are now to that amount of money at age sixty two? When we know that rate of return, we have backed into an

asset allocation model, haven't we. If it's nine, welcome to the wonderful world of being an equity investor, because it did no other there's no other known way to get there um consistently. So now we get up from that conversation and we have a we have a goal, We

have presumably a plan for reaching that goal. The folks that and I have to put in a number of dollars every one of the hundred and twenty months from age fifty two to age sixty two, and they're going to have to realize a rate of return of why on that that's a plan. Now, what are we asking the plan to do. I don't think we're asking the I wouldn't be asking the plan to do anything but produce um long term trendline returns, that's all. But let's

make sure that we don't foul those up. Let's let's make sure that during those hundred and twenty months when the market goes down, which is gonna do once or twice, isn't it, that we don't panic out and go to cash or gold coins or something insane like that. And and the once during the ten years um that the that the SMP five hundred suddenly goes from you know, two thousand to five thousand because of nanotechnology, that we don't junk the plan and take eight of the assets

and throw a limit at nanotechnology. That's what I'm That's what I mean by not not managing behavior in the abstract, but managing it in service to the plan. The plan doesn't the Plan doesn't want you to do that stuff. So let me ask you about two different types of clients. And again some of this is anecdotal, but I'm sure what I'm about to tell you isn't anything radically different

from what other people have experienced. One is the client that has a substantial pile of wealth, but they're afraid that they're going to outlive their money, right, you know, and you could show them, Look, there's only three inputs. What you start with, how much you contribute, how much time you have, And we're assuming a reasonable rate of return. We're not assuming we're not assuming two percent. He is

a mixed portfolio. What do you say to people who what do you say to either investors or advisors where there is a reasonable sum of wealth to begin with, where people continue to be concerned, they have a little post traumatic stress disorder from the crisis from the O eight oh nine crash. They're afraid that something's gonna happen that's going to interfere with their ability to retire on a timely basis, or they're not gonna be able to they're gonna run out of money, um and outlive it. Well,

that's two different things. Okay, So let's take the outlive the money first, because I seem to be hearing a lot of that letter. Well, the outlive the money is actually the big risk, and it's and it's the silent risk I think because people don't focus on it. People say, if I had X number of dollars at retirement and I could withdraw from that, why number of dollars in retirement,

I would be fine, And of course they wouldn't. Because modern two person retirement is now thirty years long, and a trend line inflation, the cost of living goes up two and a half times. That's the thing that's the big risk um people going off the reservation. Okay, that's always a risk in fads and fears. We always have to live with that. But I think year in and year out, decade in and decade out, people have to be looking at the modern retirement as essentially a problem

of purchasing power. And I think most people still look at it essentially as a problem of principle. So let's let's talk about that, because that's a fascinating um descriptor. We currently live in a low inflation environment. History tells us that this is somewhat temporary. How significant is retaining purchase power purchasing power ten twenty thirty years into the future, especially as lifespans just keep getting longer and longer and longer.

As I say, it's the issue, most important issue for financial plan well for a retirement plan. By the way, how often do you ever hear anybody in the news media or television news say your biggest threat is inflation years from now because you're going to outlive your money. Never never, that's again, I mean, I keep coming back to this, but that's why God sent the behavioral investment counselor into the world, because no one will say the truth.

How many times is somebody going to turn on CNBC to hear somebody say, you know, the big problem is not loss of principle, it's erosion to purchasing power. The ninth time that media say the truth, people will will no longer turn on the media. They'll they'll either get it or they won't want to hear it anymore. And that's why you can never get truth from media. You

can only get news. You can say that again. Let's say you can never get truth from media because people are either bored with it or don't believe it is. You know, they either get bored with it or they get it. They get it, and it's old news at that poa. People say, okay, I got this. Now I've just heard this for the ninth time. It's starting to

sound familiar to me. I'm going to go to my financial planner and plan out a retirement during which my course of living goes up two and a half times, and make awful, awful sure that I own things whose income is going up at at least that rate. And honey, don't forget to turn off the television set before we get in the car to go to the financial planner. This is what media cannot abide. It can't allow it,

and so it cannot tell the great truth. It's it's focused on capturing eyeballs, not winning hearts and minds, so to speak. Headlines not history, headlines not history. I really like that. It's uh an era of distraction that we live in. There's a never ending stream of things. We mentioned Facebook earlier, but between Facebook and Twitter and a million channels and everything else, what is then impact of all of these various streams of of snippets of news

and data and information. Well, I think inside the media themselves, it's the The effect is that they go crazier and crazier and crazier trying to capture eyeballs. They there's no thought anymore. There's just trying to flag you down and in the and and of course in the the poor American household, what's going on is they're getting submerged in noise. They're getting completely inundated with noise. And there's so much noise that you can't really analyze anything anymore or think

about anything anymore. And what the normal mind does is it goes to data mining. It takes out of the noise what it wanted to hear, all the selective perception information bias. Oh, I kind of like that. I'm gonna grab onto it. That to me is the big, big outcome of the tsunami of noise. So you we have a retirement system in the United States. We don't have

very much left in terms of pension funds. We're not like Europe with a guaranteed retirement that leaves people with an ira H some sort of four oh one k if if they're fortunate enough to have their company offer that and then whatever other savings uh they can do.

What are your thoughts on things like for oh one case iras and tax deferred retirement accounts, Well, my bias is to think that you should fund any protected harm and fund that you can, even though you're given up capital gains treatment on the other end, for the compounding effect, you are um and there are people who who agree with that, in people who don't, I guess, um net net. If you're putting money in pre tax, aren't you essentially leaving yourself that much more money to invest? Well? I

think you are, and I'm not oversimplifying that one. I don't think so, all right? And then I had a reader who when when they said, oh, you're interviewing Nick Murray, ask him what he thinks about annuities? And so I'll ask you, what do you think about annuities? You have to refine the question. You have to narrow the question. What do you think about annuities for a person who's already maxed out all their other tax deferred accounts? It depends.

First of all, are we talking about fixed annuities? Are variable annuities? And let's let's go let's let's go into that. Most of what I see advertise these days are variable a nuity. But what do you think about fixed annuities? I think that their cancer, the same as all bonds are cancer. All fixed income is cancer. It's death on the installment plan, it's the planned liquidation of purchasing power. Within your lifetime, the planned liquidation of purchasing well, death

securities are the planned liquidation of purchasing powers. So what's the role of fixed income into a broad asset allocation model? I didn't know that it had one. No, So you you prefer an all equity portfolio for long term investors? For long term investors, yes, for money that has more than and I and I confess this is arbitrary, more than a five year horizon. For capital that has more than a five year horizon, I cannot after some provision

for an emergency fund. And what I've always said for retirees was two years living expenses in a in a money market fund. But two full years, well, yeah, that's that's a substantial sum. How how realistic is that for many people? Because we often see preached while you're working six months emergency funds and getting people to do that is a challenge. Yes it is, but look at it, and I don't gainsay the challenge. Again, that's the job

of the advisor. But but if I'm going to get if I'm going to try to get people to put substantially all of their retirement assets in equities for the third for the next thirty years, which I'm sure going to try to do. I'm gonna err on the side of caution with maybe a bigger, you know, emergency fund than you need, not for financial reasons, but for for emotional reasons that you that you know that you could turn off your withdrawal for two whole years and you're okay,

and you're okay. That makes perfect sense. Let's talk a little bit about some of the new technologies that are out there, um, and some of the new investment fads, knowing in advance what you're gonna say about most of these. What are your thoughts on smart data? I have no idea what to do. I was expecting something along those lines, you know, beta that's smarter than regular beta. That would be a wonderful, wonderful thing, I think if it were. And and then the next thing, um, I know your

answer to what what are your thoughts on robo advisors? Well, I think robo advisor is a contradiction in terms. It's it's an oxymoron. So either you're doing it yourself or you have an advisor doing it for you. But having software do it doing it for you doesn't really accomplish much, does it. No, it doesn't, because what it does is it it asks you a lot of questions which you have virtually no equipment to answer. What is your risk tolerance?

Does anybody, any sentient being, on any given moment, know what is risk tolerance is? And is it any less labile than blood pressure? I mean, if the market goes up for a week, his risk tolerance goes down if it goes you know what I mean. You know where I'm going with this. When you ask people the risk tolerance, what you're really asking is what has the market been doing for the past six months? Absolutely so, the machine asks people questions that they have only the vaguus idea

how to answer. It takes those questions and and hands back a canned portfolio. When the canned portfolio goes down every five years, whether it needs to or not, uh, you know, the client calls up the robot and says, open the pod. The Doris How and How says, I'm afraid I can't do that, Dave. You know, I just it. I can't hold the concept of robot and the concept of advisor in my mind at the same time. Something

is one or the other. There was and I think it's starting to abate because people like you have have made these kinds of arguments. But there was a period of I want to say about two or three quarters where the advisor community was genuinely distressed over the coming robots, and UM, that seems to be starting to abate a little bit. What what's your read on that? Well, my selfish read on that is none of my subscribers were

victims of that. I if if a real, honest to goodness advisor was worried about a robot, he was really fessing that he had no value proposition at all. Let's let's talk about the value proposition, because that's the question I have teed up a little further down the road. And this is something UH for listeners that Nick has written about extensively. What is the value proposition of advisors who are essentially managing the behavior of their clients? So

so how would you define that? Well, the any value proposition is the relationship between what somebody is giving you and what he's charging you for it. Right, So there's there's there's two variables in a value proposition, what you get and what it costs. And so um, an advisor has a positive value proposition when his client says, the advice I'm getting here is much more valuable to me and my family than what I am being charged for it.

The converse is also true at the moment that a that a a poor American client wakes up and says, you know what, I'm paying this guy all this money and I'm underperforming the S and P five. Why am I doing that? At that moment, the advisor has lost his value proposition. It's gone negative. And why because the advisor hasn't made the points of what his value propersy.

What is it that of that an advisor does that it is worth palpably an order of magnitude more than the one percent or so that we're charging in the industry for for asset management. To me, there are three things. One is planning, which we know they can't do on their own. One is a long term historical perspective, which we know they can't get out of the noise. And the third, and of course the monster for me, is

behavioral coaching in periods of stress. If if it isn't intuitive to somebody that the value of those three things must be far greater than a point, then ay, there's either something wrong with him or his advisers a stumble bump, because if you couldn't make those points clearly and compelling lee and have a reasonable person sit there and say I got it, I see why. That's in total, those three things have got to be worth more and and at critical inflection points, and much more than the point

that you're charging me. Well, using the study that you mentioned in behavioral investment coaching, if people are under performing their own investments by six and you could prevent them, let's go at half and you could prevent them from

doing that for a point, your five points ahead. That's compounded as an enormous thing compounded, it's off the page that that's before we even start talking about By the way, here's an intelligent rational asset allocation that avoids the fads and the whatever is in vogue and and basically keeps you on the straight and narrow. That that sounds like the value proposition there? Well, I hope so, so I know I only have you for a limited amount of time.

You're heading uh two part south. It's not hot enough in New York today at ninety degrees and humid. You want to Kentucky and hit but it's a but it's a wet heat, so it's not it's not that bad. So let me let me go through some of my favorite questions that that I asked that I ask of all of my guests. And some of these you've either hinted at or alluded to, and and feel free to to be as as brief or as worthy as you

like on any of these. So we haven't one of the things I speak to people about all the time, or our mentors. And you've kind of said, you know, I don't really know how to describe mentors because I've cut my own path and and done something different. But who are the people that influenced your approach to helping investors manage their clients? Well, they're mostly people I've read

rather than people that I interacted with personally. So then let me ask you that same question differently, what are some of your favorite books on investing behavior and related subjects? And I'll put up Fortunately for me, as far as I know, there is no other book about investor behavior

managing investor behavior than mine. But you know that the two big books that philosophically were important to me um I mean of critical importance to merit are high X, The Road to Serfdom and of course closer to home um Stocks for the Long Run by Jeremy Siegan, which I regard as definitive. Really yeah, yeah, and it just gets better by the way each um it's on the fourth or fifth edition, now it's been and it just

gets better. And before people send me emails saying why don't you get Jeremy Siegel on the answer is he will be on. I just have to wait for him to come to New York from Philly. Always worth listening to, but much more worth reading. What I find fascinating about Seagull. And I don't know if a lot of people know this. Him and Bob Schiller of Yale. So Siegel's at Wharton, Schiller's at Yale. They're longstanding friends and colleagues. They're family's

vacation together. They know each other. The two of them could not be any more different as as personalities, and yet they're they're fast friends. So Stocks for the Long Run, Road to Serfdom. Anything else leap out as significant or seminal or of economics or investing. So let me ask you about economics, because you you remind me a little bit of Larry swedd Row, who says he doesn't care about earnings report or economics reports. He just wants his

clients invested for the long run. How important are are the economic data points of the day, week, and month. There are no importance to the long term investor at all. They can only be distractions. They're only so that that makes me wonder why hiak as opposed to Burton, Malkiel or Graham and dot or something along those much further upstream at a at a theory of how economics works.

This is not about data points. This is not about it. No, this is about broad philosophy, philosophy, free markets, government involvement, etcetera, etcetera. That that's um You've you've alluded to that you've quoted Hawk and some of your newsletters. But I don't know how how seminal and how significant that was. It was actually really critical. I'm a a Queen's Irish Catholic from um, you know, a family of Roosevelt Democrats, And in my turn,

I was a Kennedy Democrat. And I got to Columbia and was trying to finish at night when the riots broke out, and I was coming from the office every day in a suit which I had paid for and I had paid for my tuition, and Columbia let the hooligans take over the campus. And I looked around and said, I don't know if I'm a liberal anymore. That's the old joke, is a conservative as a liberal who has mugged? Is that is? That? Was that your experience? Yeah? Actually

it was. I mean it's anecdotal, but it's true. It sounds like something one is looking for retrospectively, but I'm not. It's it's it's the That was the dividing line. I walked off the campus in I've never been back. And that's why, to quote Bluto, um seven years of college down the drain was and I so, you know, then then I started looking around for another way to process reality and and basically founded in higak. And then you know, in the Reagan Revolution, I mean, the the great mystery

of of America life in my lifetime. The great surprise to me is that that we have to go back now and fight the Reagan Revolution again because I thought that it would have been proven. Isn't the nature of politics and economics for that matter. The story of the pendulum swinging from this cycle. Hey, look, great society. Hey look big tax cuts and reduction of regulation. Hey look up, now we're reregulating. Hey, look now are dereguling. Isn't it

every forty years? It's it's you know, it's it's It's funny because I grew up at people always surprised when I say this, So you're you have a couple of

years on me, but not that many. I grew up a Jacob Javits Republican in Nassau County, Long Island, and that sort of flavor of republicanism, which was small government, balanced but ugets, low taxes, but no overseas involvement, right because we learned from Vietnam, And no government intervention in the bedroom, because you know that's private and the government

has nothing to do with it. And I've watched each of those things over I'm fifty four, I've watched each or I will be shortly, each of those things swing back and forth over that half century, and it's in it's in vogue, it's out of vogue. This is in vogue, this is out of even sadly, all of that is true, and it's just that I'm taking it badly. Well, but you you know that the pendulum is gonna eventually swing

back from one extreme to another. And it's why I always mocked my politically active hedge fund buddies who seem to think that the occupant of the White House is going to be the final determinant of their portfolio. And a presentation I gave, I have these two slides. I love to show this. It angers everybody. Anytime you could

get everybody be angry, you're onto something. So the first slide shows two thousand and one George Bush tax cuts, and my Democratic buddies will say, giant tax cuts, gonna blow out the Deficit's not gonna do anything for the economy. Get out of stocks. And then over the ensuing six years, the market goes up. Fast forward to March o nine. Now it's my Republican buddies and they're saying, this Obama guy is a Kenyan Muslim socialist. Get out of the markets.

And now over the next seven years of markets, it almost makes no difference who's in there. If you're making your decisions based on the politics. To get out of the markets, you're asking for an underperforming portfolio. You're asking for a disaster because there's no correlation between the economy and the markets over any but the very very longest term.

And what I will say is, I've never seen two economies like I see two economies now, you meaning being the private economy has basically walled itself off from the corporate economy, has basically walled itself off from the political, the the what I would call the collectivist, redistributionist impulse

you in in the crash. I mean, the one of the great things, one of the many great things that came out of the crash for me, was the reliquefication of Corporate America, paying down debt, accumulating gigantic amounts of cash and not letting go of it. Have have Corporate America's balance sheets ever been healthier than they can't have been, but certainly not in my lifetime, right. It's it's amazing. And I say that to people and they look at

me like I have two heads. You have the cleanest balance sheets, the least amount of short term high price debt, and the most amount of manageable debt relative to equity and cash on hand. And you've also got excess reserves in the banking system like you've never seen before. And we'll never see again. We just implemented the Vulcan rule, which now says, hey, listen, you could you could be a hedge fund if you want. You just can't be

taxpayer ensured. The A lot of the rules that were undone, commodity futures, monetization at class Deegal repeal, A lot of those have slowly been put back into place. So the fear that we're setting up for an imminent crash and everything is going to go back to the Stone Age really seems to be fairly on irrational and not guided by any sort of of rationality of fact. I think

that it's a basic inbred catastrophism. People to look at corporate America today, the cash positions, the debt positions, the the just almost anything you want to look at, pe s no more than slightly above the twenty five year averages full fully valued, maybe a touch above six fifteen maybe maybe Yeah, that's the most I would give you

sixteen versus fifteen. And in the next breath, I would say, what the hell do you expect in a in a market there's no competition for bonds and the um so, so do you you know where do you get a catastrophist worldview out of that. I call that the recency effect. We just lived through and then we just just happened. So my muscle memory is I'm ignoring the huge run ups in O nine because I'm so scarred by what happened in OH seven and O eight, which tells you

how early we are in this bullmarket. Which again I say that to people and they look at me like I have two heads. When they stop looking at you like you have two heads, is let me know, because then it's getting late. Okay, It's that's a validation all of the looking when when you when we say things like that and people look at us like we have two heads, that's the best news we got today. You know, we talked about noise and distraction before. I had a

really interesting conversation. So for those of you who are listening, a friend, Ben Carlson is in the Engineer's booth. You may know him from a Wealth of Common Sense, is a blog and a book he writes. And we were talking on the way here about you know, ten years ago, pre Twitter, pre Facebook, during the dot com collapse in the late nineties and the early two thousands, the same people who were saying dumb stuff that we now read

on Twitter or Facebook or elsewhere. We didn't have access to some of the really ridiculous and I won't mention any names, but some of the stuff that's just a third and ridiculous and insane. You would hear someone would say something at a cocktail party or a barbecue, and you'd roll your eyes walk away and say, God, this guy must be losing so much money he can't get out of his own way. I don't want to be infected by him. I don't want to hear him. Now

that's my tweet stream. Now that's what I see on LinkedIn and Facebook and and online and and in various UH media outlets. You can't escape it today, where as you used to be able to walk away from it. Long may it wave, because that basically tells you there's a lot more. If you saw, I mean you, if you saw, of course, you saw uh J where Greece was circling toilet China. China blew up and amid all this worldwide chaos for reasons they couldn't begin to explain.

The New York Stock Exchange shut down for four hours. There was nothing, nothing on TV. That day, but that it was the Titanic and Pearl Harbor and and the Twin Towers. It was every disaster in history it was. It was the Black Plague. I mean, I haven't seen figures for um, you know, mutual fund on et F withdrawals, but I imagine they spiked like they have rarely done

a one day spike in our time. And my son actually is in the real estate business in in Brooklyn Heights and he emailed me and he said, am I supposed to be taking this seriously? And I said, no, of course not. What why and yeah? And he said, because everyone in my office is crowded around the TV set. The phones are not being answered. Everybody's watching this like

the Handenburg. And I said, you know, I thank you so much for telling me this, because it tells me how early we are still, how early we are in this bull market. I don't think we have any idea candidly how early this could be the third or fourth inning. People talking about it like it's the eleventh like it's the eleventh thing. By the way, my favorite data point about Greece is it has the GDP of Alabama. Sounds about right that I heard Houston, But I guess it's

the same difference. Yeah, No, Houston is a decent, big, decent sized city. I know I only have you for a few more minutes, so let me get to my my last few favorite questions before we put you on a plane. Um so you talked about Hiak and Siegel. What other investors might have impacted your your thinking? Not authors, but investors of course. Um So, wait, you have a thing for value and mart long term thinking? Is that?

Those are among my many biases, you know. But um the relentless bullishness on the American economy, the realization, you know, which is so characteristic of him, and also just the plane down to earth countercyclicality of him. The opportunism in in terrible markets, you know, the the whole our favorite holding period is forever thing I find so attractive, refreshing even Yeah, don't you remember in the late nineties he's

a dinosaur. He's done. Yes, absolutely, and and and I remember also, although I was not there his annual meeting in either, it must have been in were people were getting up and begging him to start a separate tech fund. They accepted his saying that he can't do tech that he doesn't understand it in the next breath begging him to to start a tech fund, and you know him saying,

this is not gonna have lights out here. Um, so, what is some of the most significant changes that you see that's impacted the industry since you joined it, the financial services industry, Well, the rise of women certainly is I mean, since that's fascinating, is the single most um important and positive development in your You have to be familiar with the studies and data that essentially says women tend to outperfore men, that they don't suffer from testosterone

poisoning or many of the same bravado that men stuffer from, and it ends up helping them do better in their portfolio management. I'm not familiar with any studies, but it's intuitive. And the other thing is from the financial stand financial planning standpoint, women relate to people and there and their hopes and their fears and their family concerns. I think somewhat better, if not much better than then men advisers

tend to do. The man will focus on the portfolio and the woman will We'll focus on the family first, and the woman is always right, So you know, just the release of of all of that energy and and empathy and brain power. Uh you know you you in n you walked into Harry's at Hanover Square. No, there wasn't a woman in the place. There weren't even waitresses, you know what I'm saying. Sort and and you know to turn around now and and see the way it is.

I mean, I can't imagine even technology has to take in my mind, uh second place to really that. That's fascinating. And I could tell you from personal experience trying to book women guests. The this industry still remains tremendously male dominated. And we've had huge, wonderful guests Sheila Bear and liz Anne Saunders and last week was Danbisa Moya, when we've

had Michelle Myers from from Marrow Lynch. But you look around and you try and book high profile female guests to come in and speak, it's still a tremendously male dominated business. I would love, for the reasons you described, to hire a female CFP for our office. We put out the last time we advertised, and it was on LinkedIn, we advertised for wanted Certified Financial Planner, Competitive salary four oh one k healthcare blah, blah blah. We got over

a hundred responses, not one female. It's amazing how skewed. The industry remains well, but it's changing and it's getting a little bit better. But it's my frame of reference. Well, when you started, so you have a few years I've been doing this. You've been doing this, what forties in coming up on fifty years, so you got me by just a couple of decades. I've watched it start to change, but it's been very slow and it's been been modest.

When I began, most of the women were working in the back office and they started coming out either onto the sales desk. Right now, when you look at investment banking and research, there's many many women in the research division. That seems to be the the area that opens up most aggressively in first but when you look on the planning side there there are still a disproportionate number of men, and it seems to be changing really slowly. No argument.

It's a that's fascinating you. The first person who's use that example as as um one of the things you've noticed changing. I'm fascinated by that. Um So now you mentioned that as a pass shift what's the next major shift you see coming. I don't. My mind doesn't work like that. You're not looking forward in terms of what might happen. You're looking at what. Actually, I mostly don't

think about the industry. Really, Yeah, you're thinking about the client based my my client, the advisor and his clients the Americans. Do. Do I even need to ask you about the advantages of the fiduciary standard or is that just a no brainer? Well? I think I don't think it's a no brainer, depending on how you you define

the fidu a sary standard. I don't know that. First of all, we're all supposed to be have been acting as acting like fiduciaries all along in the sense of what you and I know to be the fiduciary standard, which is that you that you you do what a reasonable person would do, and you you put your client's interest ahead of yours. Um, a federally mandated fiduciary standard

can't possibly be that clean or that sane. If we get deep into a federally mandated regulatory fiduciary standard, you're going to get them saying things like you you have to provide the lowest cost product, or you have to provide the lowest cost um and sometimes it's not just the dollars, and it's got nothing to do with the fiduciary standard. Where where is it written the lowest cost product is the best for the client, or the lowest

cost advice is the best for the client. The only thing that bothers me about the impending fiduciary standard, if indeed it is a impending, is the tendency of a nanny state, a really viciously anti capital, anti wealthy people, anti advisor state, which is the which is the state that we live in today, um from defining fiduciary in a way that none of us have ever heard of before. That's a valid criticism. When I look at fiduciary I'm looking at it from the other side of the coin,

which is suitability is such a silly standard. Don't sell Grandma Facebook. I p o s at something that moves people towards. We all know that putting the client's interest first is the right thing to do, but when the vast majority of people in the industry don't have that standard,

it creates all sorts of problems. And my concern is who's going to take care of these people, if they don't have money safe for retirement, or they've given up too much to high priced advice and I don't mean one percent, I mean suitability advice, They're not going to be left with enough money to retire on um. And I a sphere that ultimately it's going to come out of the taxpayers pocket left. Well, I don't think that's

I think that's a reasonable concern. But I don't think that the presence or absence of the fiduciary standard has anything can do with the human nature has everything. Of course, uh one half of Americans and over when the sun came up this morning, we're living a hundred or sent on social Security and you ain't gonna fix that with a fiduciary standard. You ain't gonna fix that with anything regulatory.

That's that's human nature. And are those as you know, social security tanks and and medicaid tanks are the are the taxpayer is going to end up um carrying a lot of that water. Sure they are. And that's and and and by the way, that will be back to your point about the pendulum. That will be a thing that sends the pendulum to the opposite streaming all right, so I know I only have you for the five

more minutes. Let me get to the last two questions. Um, what sort of advice would you give to a millennial or someone just starting out their career today, whether it's in finance or elsewhere. Well, no, it's that's two different questions. A civilian miln neal, I would say, save ten percent of your pre tax earnings, inequity inequities and open your statement when you're seventy one years old, so just don't even know. Give it fifty years and you'll do okay.

And now the second half of the question, what advice would you give to someone going into finance right out of school today? When again it depends on what you mean by finance if you if you mean what what my guys do personal financial advice? I would say, because

the the this profession has aged terribly. It's almost like the thirties and forties where no young people came into the business after the thermonuclear and so what you ended up with in the nineteen fifties and early nineteen sixties was a very old profession and eating today it is repeating today. And what I would say to somebody who had the who was smart enough to come into the business now when it's deeply unfashionable to come into the business,

or at least I hope it still is. Is go apprentice yourself to somebody, you know, sixty years old, somebody who's seen all the wars, who has fought all the wars, and just sit at his feet for ten years, and hey, you'll learn everything that that there is to learn, and be you'll inherit the business on some some basis or other. This has come up several times in our office, and

that what what is your succession plan? Well, it's my name is on the door, but my partners fifteen years younger than me, and the next guy in line is five years younger than him, and everybody's capable of stepping into these roles. You don't really think about that under normal circumstances, but it's something that's significant because people want to know, Hey, if you are hit by a bus,

is the farm going to continue? I think that's going to be an ongoing issue for these guys who don't have a junior at their feet who could pick up the ball and run with it. So it's already becoming a huge issue. That's amazing last question, because I know we've got to get you out to an airport. What do you know today that you wish you knew? And I'm going to change the question forty nine years ago when you began in this industry, well, not in a

minute and a half, I mean the short answers. Ever, you take the next next plan with the short answers everything, but the long answer is the rationality of capital and the efficiency of markets in the long run. If you what I wish I had known as a beardless stock picker in a in a performance mad age, was that you didn't have to be a hero. I love that sentence. What I wish I knew as a beardless stock picker in a performance mad age, which is exactly what I was.

You did not have to be a hero. How long did it take you to figure out that you were on the wrong path, Well, it was a series of epiphanies, and it took the total The total time was fifteen years and so fifth. That means for thirty thirty five years, you've been preaching pretty much the same story in books and newsletters and appearances and conferences and all sorts of other events. You're shaping a big swath of the investor community, who in turn are helping the investing public achieve long

term success. Well, Nick, I can't thank you enough for your UM. I can't thank you enough for your time and and being so willing to sit here and answer my silly questions. It's been a pleasure. And I know for those of you who are still with us at the end, this is a little inside baseball if you're an investor, but I hope you learned something fascinating about how money has managed managed and how the business of

asset management progresses. And for people who want to find more of your stuff, Nick Murray dot com and then Nick Murray newsletters dot com. Nick Murray dot com. Uh, thank you. UM. Mike Bannick is our head of research, Charlie Volmer is our producer, and Marx and Scalchi is our engineer. UH. Be sure and check out all our other interviews. You could look Up an Inch or Down an Inch on iTunes and see the other fifty two interviews.

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