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Cliff Notes: THE TOP 10 SECRETS TO INVESTING with Ian Dunlap · Earn Your Leisure

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Speaker 2: Number one, investing is relatively easy. We as humans make
2:16
Speaker 2: it hard there. I think in business there's been more
2:19
Speaker 2: books written about investing how to invest than almost any
2:22
Speaker 2: other subject on Earth. And even from a standpoint of
2:28
Speaker 2: people messing up and mismanaging client accounts, the same mistakes
2:31
Speaker 2: get made decade after decade, but we make it so complicated.
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Speaker 2: It does not have to be. After you read two
2:38
Speaker 2: three hundred books, you're going to come to the same
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Speaker 2: assessment of you're either going to ultra focus on a
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Speaker 2: few or you're going to index, add bonds to your
2:47
Speaker 2: mix and have a concentrated portfolio that's spread out across
2:51
Speaker 2: the market. I want you to put in chat, which
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Speaker 2: one are you going to do? Are you going to
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Speaker 2: be hyper focused on a few or are you going
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Speaker 2: to spread it out and get exposure to everything in
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Speaker 2: the market. But type and chat, investing is not hard,
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Speaker 2: especially when you're holding for the long term. I want
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Speaker 2: you to go to Barons after tonight and look up
3:11
Speaker 2: this article how to turn three thousand into forty one
3:14
Speaker 2: million lessons from investing in a century. Kudos to al
3:18
Speaker 2: for that amazing article. Number two, The best companies in
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Speaker 2: the world focus on global domination across multiple industries. Homework
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Speaker 2: item number two. I want you to go look at
3:29
Speaker 2: the number of companies that Apple and Amazon have acquired
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Speaker 2: since two thousand and three. They look like Lucian Grange's
3:38
Speaker 2: budget for acquisition of artists at Universal. If you look
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Speaker 2: at everything that they've acquired, it's twenty to forty companies.
3:46
Speaker 2: Inside of those businesses that comprises one brand, that being
3:50
Speaker 2: Apple and Amazon and Microsoft as well. Second tier companies
3:54
Speaker 2: focus on incremental growth and their competitors. So back in
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Speaker 2: the day, back in the Bomber days, there was an
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Speaker 2: over emphasis on trying to beat Apple. There was not
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Speaker 2: a high emphasis on being best for your customer. So
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Speaker 2: for those of you with businesses that own brands obsess
4:10
Speaker 2: over your customers or clients' lives getting better, kudos you
4:14
Speaker 2: in the stock club. I know, I don't know. I always
4:16
Speaker 2: answering if you guys call, but I've tried to do
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Speaker 2: my damn best to give you some of the highest
4:20
Speaker 2: terms in the market. And then if you look, Amazon
4:24
Speaker 2: shipped one point five billion packages over the holidays, that's
4:28
Speaker 2: going to put a lot of pressure on Postal Service
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Speaker 2: DHL and any other carrier as well. So they've required
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Speaker 2: eleven more planes to ship faster, and at some point
4:38
Speaker 2: we may even have same day shipping be a norm
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Speaker 2: in a five or six year period. Number three, please
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Speaker 2: write this down. Marry the brand that you love the most,
4:49
Speaker 2: if there's a religious movement behind it. Let me say
4:52
Speaker 2: it again. Marry the brand that you love the most,
4:56
Speaker 2: and if there's a religious movement behind it. The Apple
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Speaker 2: stores the church. Steve Jobs was the messianic figure. Apple was,
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Speaker 2: of course their version of the cross. The iPad was
5:08
Speaker 2: their Bible. Tesla's going through a similar run now. You
5:12
Speaker 2: can argue in the nineteen eighties and nineteen nineties that
5:15
Speaker 2: IBM had a similar structure. Amazon is going through it now, Starbucks,
5:20
Speaker 2: and there's Nike. There's about fifteen brands we can name.
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Speaker 2: But if you absolutely love a brand and everyone tells
5:27
Speaker 2: you that you're crazy, and even for those of you
5:28
Speaker 2: that love bitcoin, right, if there is a brand that
5:32
Speaker 2: you love, you need to tie your money to that. Potentially,
5:36
Speaker 2: I'm not an advisor, so I can tell you what
5:37
Speaker 2: to do, but tie your money to that. For the
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Speaker 2: lifetime of you investing into the market. It's the fourteenth
5:45
Speaker 2: anniversary of Apple's iPhone ten thousand and would have been
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Speaker 2: four hundred and forty seven thousand. Now. I remember having
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Speaker 2: a first iPhone. I did not invest ten grand I
5:54
Speaker 2: kicked myself and asked for it every single day. So
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Speaker 2: I'm telling you from personal experience. And then as you
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Speaker 2: get older, for those of you that are in your twenties,
6:00
Speaker 2: you're gonna feel like your thirties are never gonna come,
6:02
Speaker 2: and you're gonna lookup. You're gonna have kids and responsibilities
6:05
Speaker 2: and bills, and you're gonna be like, damn, I should
6:07
Speaker 2: have invested. I was into this hot thing when it
6:09
Speaker 2: was first getting popular. A ten year holding period is
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Speaker 2: almost perfect for every asset class. Please write this down.
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Speaker 2: So the average return for indexes seven to twelve percent.
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Speaker 2: If you look at tech, the average return on a
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Speaker 2: yearly basis is gonna between fifteen and thirty two percent,
6:28
Speaker 2: depending on which company you pick. The average return for
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Speaker 2: real estate is ten point five percent, and the average
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Speaker 2: return for art over the same period it's ten percent
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Speaker 2: a year over the last four decades, so a five
6:40
Speaker 2: year horizon is actually short and tonight, I'm gonna give
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Speaker 2: you the timeframe that works the best to hold your
6:45
Speaker 2: investment to almost guarantee that you will receive a return
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Speaker 2: on your investment. Now, uh, this is key. Please write
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Speaker 2: this down. If you don't take anything else from my
6:55
Speaker 2: segment from the show, write this down. The three most
6:59
Speaker 2: important ending didicators in investing. One quantitative easing, so if
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Speaker 2: the FED stops printing money, especially during the recession, we
7:09
Speaker 2: will go to hell in the hand basket very fast.
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Speaker 2: Number two then verted yield curve. We talked about it
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Speaker 2: many times. It's the only indicator that predicts recessions one
7:19
Speaker 2: hundred percent of the time. And every single one of
7:21
Speaker 2: you that are watching should have an alert set for
7:25
Speaker 2: when we cross Number three. A twenty year hold in
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Speaker 2: the market, So ten years in the S and P
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Speaker 2: five hundred, you will be positive ninety four zero point
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Speaker 2: one percent of the time, which is amazing. That takes
7:37
Speaker 2: almost all the risk away. But if you hold the
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Speaker 2: S and P five hundred over twenty year period, and
7:43
Speaker 2: you can look over any twenty year period, you're damn
7:46
Speaker 2: near guaranteed to win. Now, of course, investment has considerable
7:49
Speaker 2: risks that would change if the Fed stops printing money.
7:53
Speaker 2: If we lose our stronghold and venture capital Silicon Valley,
7:57
Speaker 2: and then transitioning from incubation to go in public, that
8:01
Speaker 2: could change. If your currency, of course, could be an issue.
8:04
Speaker 2: There's a bunch of threats that are there. And also
8:07
Speaker 2: we'll talk one day about where we are in the
8:09
Speaker 2: cycle of empires and maybe our Josh said tonight as well.
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Speaker 2: But over a twenty year period, you won't lose in
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Speaker 2: the market. And I know the tough part is if
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Speaker 2: you're getting started, you're like, I don't want to wait
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Speaker 2: twenty damn years to see a return. I'm not saying
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Speaker 2: that you have to wait twenty to see a return,
8:26
Speaker 2: but over a twenty year period, especially if you have
8:29
Speaker 2: kids or grandchildren, it's the best time frame for you
8:32
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Speaker 2: On a decision that you make today. And kudos to
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Speaker 2: And for those of you that still have your grandparents,
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Speaker 2: call them today because I would do anything to be
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Speaker 2: able to talk to mine. Well, look at this, since
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Speaker 2: inception Microsoft born ass Microsoft, and even through that bad
11:52
Speaker 2: decade Bomber, kudos to you. If you're listening, maybe he'll
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Speaker 2: come on the show. Microsoft is up three hundred and
11:59
Speaker 2: fifty nine thousand percent since inception. Apple is up one
12:03
Speaker 2: hundred and twenty four thousand percent since in s and
12:07
Speaker 2: you guys can go to macrotrends dot net if you
12:09
Speaker 2: think that I've fell off a chair and hit my
12:11
Speaker 2: head and made these numbers up. Bitcoin is up ninety
12:15
Speaker 2: six thousand percent since twenty eleven. And I'm not the
12:17
Speaker 2: biggest bitcoin fanboy there is, but you can't argue with
12:22
Speaker 2: the growth, especially since twenty eleven and then Monster Beverage
12:26
Speaker 2: is a company that people still continue to sleep on
12:28
Speaker 2: year after year. They're up three hundred and sixty six
12:31
Speaker 2: thousand percent. Now let me ask you this, how much
12:33
Speaker 2: better would your life have been if your grandparents had
12:36
Speaker 2: invested in one of these companies for you? And there's
12:42
Speaker 2: some for those of you that love Tesla. If you
12:44
Speaker 2: think that Tesla will have a run and Neurallink will
12:47
Speaker 2: dominate and SpaceX will dominate, are you willing to hold
12:51
Speaker 2: Tesla of twenty thirty forty years for your grandchildren so
12:54
Speaker 2: they can have a better life? Want you to make
12:57
Speaker 2: the decision because it will greatly affect if they act up.
13:01
Speaker 2: You can always take the money and use it for
13:02
Speaker 2: yourself and for those of you that have passed on
13:05
Speaker 2: money to your children, you know usually in two or
13:06
Speaker 2: three generations they blow the money anyway. So it's a
13:09
Speaker 2: good hedge for yourself. We talked about this before, but
13:14
Speaker 2: time in the market. So the length of time that
13:16
Speaker 2: you hold plus capability to time the market plus invest
13:22
Speaker 2: in the assets will low draw down is a gift
13:24
Speaker 2: from God. So if you look at Apple, you can
13:28
Speaker 2: do this. Go to microtrends dot net and you can
13:30
Speaker 2: see how often does a company or index draw down.
13:33
Speaker 2: Draw Down means to lose money. So Apple is up
13:36
Speaker 2: over a forty year period sixty seven point five percent
13:39
Speaker 2: of the time. The crazy part is over the last decade,
13:43
Speaker 2: they haven't closed negative ten percent for ten years now.
13:49
Speaker 2: Two thousand and eight. They had a rough patch, of course,
13:52
Speaker 2: and before this next transition and shift the power from
13:57
Speaker 2: Steve running the company to ten running it, they had
14:00
Speaker 2: quite a few more draw outs. But to look at
14:03
Speaker 2: the last decade and for a company with that market
14:05
Speaker 2: cap to not have drawn down and stayed under ten
14:07
Speaker 2: percent is absolutely amazing. And this is one When I
14:12
Speaker 2: saw it, I was like, I cannot believe this is true.
14:15
Speaker 2: Because of COVID, twenty three percent of all money that's
14:19
Speaker 2: ever been printed in the history of the FED was
14:22
Speaker 2: done in twenty twenty. You need the market to be
14:27
Speaker 2: able to hedge. And now I don't think we'll I'm
14:30
Speaker 2: not an economist, but I don't think we'll print this
14:33
Speaker 2: much money again in twenty twenty one. But given everything
14:36
Speaker 2: that happened in the capital, the second and third strains
14:40
Speaker 2: being prevalent, and we are still in a little bit
14:43
Speaker 2: of an economic upheaval, we're going to have to print
14:46
Speaker 2: again in order and people are fighting now one in
14:49
Speaker 2: more than six hundred, we're going to have to print again.
14:51
Speaker 2: I think the FED misstep and didn't print early enough.
14:54
Speaker 2: But the market is the hedge because otherwise inflation is
14:57
Speaker 2: going to eat a lot of the gains and savings
14:59
Speaker 2: that you guys have put away. And this is one
15:02
Speaker 2: of the biggest ones. I need you to eliminate all
15:06
Speaker 2: personal debt. It all costs, especially credit cards, especially if
15:09
Speaker 2: your rated is like twenty four five percent. It's unbelievable
15:14
Speaker 2: because you're technically if you have a credit card that
15:17
Speaker 2: is giving you that's twenty four percent interest on it.
15:21
Speaker 2: Any games that you get in the market, if you
15:22
Speaker 2: invest in long term, it's a cancer to your portfolio
15:26
Speaker 2: and your freedom. So this year we're going to talk
15:30
Speaker 2: a lot more about the personal finance side. But it's
15:33
Speaker 2: hard to get to wealth if you have all these
15:35
Speaker 2: lumen debts over you. So I know student loan is tough,
15:37
Speaker 2: the personal credit card, car mortgage. Let's try and keep
15:41
Speaker 2: those two as minimal as possible. And this is a
15:45
Speaker 2: key lesson I wish I knew, and I missed out
15:48
Speaker 2: on the last great recession, and that's why I went
15:51
Speaker 2: all in post two thousand and nine to learn this.
15:55
Speaker 2: But you never want to waste a good recession that
15:57
Speaker 2: is lifted through quantitative easy. I want to be very clear.
16:00
Speaker 2: If we go into recession at twenty twenty seven and
16:02
Speaker 2: the fans that I am not going to print money
16:04
Speaker 2: to offset these losses, I won't invest a damn dime
16:07
Speaker 2: in the market. I don't think that I'm so genius
16:11
Speaker 2: that I was the reason that the market went up
16:12
Speaker 2: because I called a few spots and you know, bought
16:15
Speaker 2: a crystal ball off eBay. The great level was quantitative
16:18
Speaker 2: easy that helped us a ton, So be mindful of that.
16:22
Speaker 2: And this is key when doing your analysis of a
16:25
Speaker 2: company from one of the greatest investors that there is
16:28
Speaker 2: in the market today. Can this company help one billion
16:32
Speaker 2: people over thirty years? I want you to divide that
16:37
Speaker 2: number hypothetically so you get an average, and that will
16:39
Speaker 2: tell you how many people that company would then expect
16:43
Speaker 2: to help. And then you can play with some price
16:44
Speaker 2: targets and see how much money that company could make.
16:47
Speaker 2: But in your evaluation of a company, so tes on
16:50
Speaker 2: one of them, Yes, Apple, Yes, Nvidia, AMD, especially if
16:53
Speaker 2: the game of market grows. Yes, can this company that
16:57
Speaker 2: I'm about to invest in help one billion people over
16:59
Speaker 2: thirty years? That has to be a fundamental analysis question
17:02
Speaker 2: that you ask when doing your assessment of any company.
17:06
Speaker 2: And on a trading side, this is really key, especially
17:10
Speaker 2: for all my traders. You have to assume that you're
17:12
Speaker 2: wrong and every damn trade that you trade, that you
17:14
Speaker 2: take until profit is secure. So whether you do that
17:18
Speaker 2: with the trailing stop or let's say after you're up
17:20
Speaker 2: ten percent, you manually lock in three percent until you
17:24
Speaker 2: are in profit. Because even with slippage things going to happen,
17:27
Speaker 2: you can have a flash crash. Until you are in profit,
17:31
Speaker 2: you are not safe. Death is knocking on your doorstep
17:34
Speaker 2: because anytime we say I know this one is going
17:36
Speaker 2: to wear, those are the ones that are going to
17:38
Speaker 2: fall apart. Everyone went crazy about Kodak last year and
17:40
Speaker 2: thought it was going to do great hurts the same
17:43
Speaker 2: and then people end up getting crushed on the backside
17:46
Speaker 2: of those trades and hyper reduction of positions it's key.
17:52
Speaker 2: I'll talk to some of you and some of you
17:53
Speaker 2: have fifty five positions. I'm like, you made your all
17:56
Speaker 2: media find you might as well compete against Kathy. At
17:58
Speaker 2: that point, you need to reduce some of the positions
18:01
Speaker 2: that you have and laser focus on a few winning companies.
18:04
Speaker 2: These are the things that I wished that I knew
18:08
Speaker 2: at the age of twenty one to help me become
18:10
Speaker 2: a better investor, Because until you have a formula that
18:13
Speaker 2: works for you, there's going to be a sense of intimidation,
18:16
Speaker 2: and you need a process to help offset that. And
18:18
Speaker 2: even with the process, emotions kick in and we may deviate.
18:22
Speaker 2: And this is why this one is key homework for
18:25
Speaker 2: the week. I hope that we've earned a spot into
18:29
Speaker 2: your top five, but this year I only want you
18:31
Speaker 2: to focus on listening to five podcasts on investing.
18:35
Speaker 3: To hear a more extended conversation. Make sure to check
18:37
Speaker 3: out our live YouTube show market Mondays every Monday eight
18:40
Speaker 3: pm Easter Standard time, seven pm Central, and check out
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Speaker 3: the Market Monday's podcast on iHeart, Spotify, Apple, or wherever you
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Speaker 3: download your podcast.
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Speaker 2: Now five books and five newsletters and trash everything else.
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Speaker 2: My graduates from my school being forced back. Drop bag,
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Speaker 2: drop come my drop bag, drop bag drops Peace