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IFB190: High Yield ETF, Selling Disney, Finance As An Engineer

Welcome to the Investing for Beginners podcast. In today’s show we discuss:

  • The benefits and drawbacks to high-yield ETFs
  • Buying or selling Disney after an interesting year
  • Getting started in finance with different backgrounds

For more insight like this into investing and stock selection for beginners, visit stockmarketpdf.com

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Transcript

Announcer (00:02):

I love this podcast because it crushes your dreams and getting rich quick. They actually got me into reading stats for anything you’re tuned in to the Investing for Beginners podcast led by Andrew Sather and Dave Ahern with step-by-step premium investing guidance for beginners. Your path to financial freedom starts now.

Dave (00:32):

All right, folks. Welcome to Investing for Beginners podcast. Tonight. We have episode 190 tonight. Andrew and I will read some great listener questions and do our little give and take and answer those for you guys on the air. So I’m going to go ahead and read to the first question I have. This is from Eric says hi, Andrew, Dave, first and foremost. Thank you both so much for this podcast. Since July last year, I have been avidly listening, and I’ve learned so much from you both. I now have my Roth IRA with my dividend stock stripping, and we’ll have the growth I’m seeing. They came across an ETF that targets value stocks with high dividend yields in the S and P 500 SPDV is the ticker, while there was no option to reinvest the dividends into the ETF. And I instead have taken the payouts as cash in my Roth.

Dave (01:20):

It looks like it could provide additional tax-free cashflow without counting towards the annual contribution cap. But the question is, should I try and build up several shares of the ETF and my RA to achieve a decent monthly cashflow to then buy more of my handpick dividend stocks each month for free air quotes? Or would it be better to invest in the dividend stocks, to begin with? I’m not sure what the trade-off here is and would appreciate any thoughts you guys might have. Thank you in advance, Eric. Andrew, what are your questions? Eric’s great question.

New Speaker (01:55):

Hmm. Well, first off, I like the idea; as far as, you know, he’s focusing on getting income and trying to get that compound interest wheel turning and turning and turning. And that’s fantastic. I love that he’s got the Roth IRA. He’s dripping, you know, dividend reinvestment, and he’s looking to build that wealth over time, you know, not trying to make it all from zero to a hundred tomorrow.

Andrew (02:22):

That’s excellent. So the question now becomes, you know, which path am I going to take here? Am I going to try to prioritize income first with a high yield? Or am I just going to try to pick good stocks off the bat? And so I’m more in the camp of just picking good stocks off the back and let those companies do the work for you and compound for you. The whole point of investing is receiving that income and receiving a return reinvesting that and having that grow. On itself, when you get into chase chasing yield because it’s kind of what you’re doing when you’re simply just trying to buy stocks that have high yields, you’re going to, you’re going to be chasing yield. And that’s going to inevitably puts you in stocks where the stock prices have crashed a lot.

Andrew (03:20):

Now that sounds like a great thing. You are valued investors. We want to buy things when they’re on sale. However, you know, if you have ten stocks drop in five of them, let’s say five of them dropped because the market just got skinny and scared, and the other five drop because they’re businesses that are on the way out. And they’re kind of on, the tail end of their life cycle. That’s not going to give you good results. If you get half of the stocks in your portfolio, end up folding, or just kind of drifting off into oblivion, that’s not going to be good. And so, while a high yield is enticing, you have to be careful, especially in an ETF where you have no control over which stocks go into there. If it’s going to put you in a situation where you’re essentially having a lot of not, you know, not great companies in that portfolio, it’s just going to drag down the return.

Andrew (04:18):

And so, yeah, you might get a higher yield, a higher income, but I would rather have a better company, even if it comes with a smaller income because that company will grow its earnings. And so as it grows its earnings, that’s going to compound, and then they’re going to give me higher cash flows in the future, you know, higher dividends, higher income. And so you might as well start that process now, rather than try to try and set it up because regardless of which path you choose, whether you’re going with ETF to get cashflow now versus a stock that also pays you a dividend. You’re still getting free income. It’s just when you’re reinvesting into a company you already own when you’re dripping that it’s, you might not think of it as income because it’s automatically going back in. You’re getting, you’re accumulating more shares, but that’s really what you’re doing.

Andrew (05:15):

You are getting income and then buying more stocks for free. It’s just taking a D it’s; it’s taking a different form. And so it doesn’t appear the same way in your brokerage account, but that’s exactly what you’re doing. So for me, income’s important. Dividends are important. Compounding and reinvesting income is very, very important, but the companies in your portfolio are so much more important. And so, you know, I would rather buy a Microsoft in 2012, as an example, they have given me five of the top yielders in 2012, I’ll grab that Microsoft. Because over that period, they’ve grown their company like a weed. They’ve grown their Earnings like a weed, and they’ve grown their dividends like a week. So it’s just been a fantastic investment to own. And that’s what can happen when you start to pick companies like that. And if you can get them at great prices, your chances of getting good returns can increase.

Dave (06:16):

That is a great answer. And you took some of my thunder, some of the things I was thinking about why we were answering the question, you answered it. So that was, that was fantastic., I agree a hundred percent with the idea of buying better companies. One of the things that we’ve talked about in the past is when we’re investing, we’re not buying numbers that we’re not buying tickers; we’re buying companies. And one of the things that we need to focus on is finding the best companies that we can for the best price that we can and doing the due diligence to find those great companies; then those are the ones you want to invest in.

Dave (06:54):

And I guess another thing to think about, too, is if you start with buying a company or an ETF that is going to be paying you dividends that you can’t reinvest, then it could take anywhere from six months to a year to build up the funds from those dividends to be able to invest in the handpicks selected stocks that you want to buy. So that’s another year or so that you’re not compounding those companies. Now, if you got 30 to 40 years to invest, then that’s maybe not as big a deal, but the sooner you start, the sooner you get where you want to go. So that is, I guess, the other idea that I was thinking about too, and along those lines, anything that prevents you from doing what you want to do, you want to kind of avoid that if you can, because any chance that we humans can procrastinate, we’re going to do it.

Dave (07:46):

So any way that we can, we can avoid that. I know that was something I learned in college. Why, you know why, why to wait till the last minute, when the last minute is when you’re going to get anything done anyway. So I think, I think, you know, the ideas that Andrew was was sharing with us, I think they are, are the best way to think about this and think about the fact that w the best companies that you can buy are the ones that you want to own. And the sooner you get the opportunity to own them and have those in your portfolio, the better. And so I would agree with everything Andrew was saying about that.

Andrew (08:17):

And it’s a good point that you bring up, Dave, about making sure that the dividends will offer you enough to buy shares because when you’re investing in a Roth, there are limits to how much you can put into there. So, especially when you’re first starting, I mean, the most we’re recording this in 2021, the most you could have put there last year, would’ve been $6,000. So unless you had all that all 6,000 into an ETF that was paying you a high dividend, if you were kind of splitting that up, maybe, and being a little more diversified, you might not have gotten a high enough dividend to be able to buy shares of something. And then that looks at 2020,

Andrew (08:56):

If you wanted to see what can happen if you’re sucking on your thumb and how fast the market can move, especially how, how, how, how fast opportunities can slip away. Oh, yes.

Dave (09:07):

If 2020 taught us nothing, that is something that, as you said, it could slip away very, very quickly, both for good and for bad. And so things that have moved far faster this year than we’ve probably ever seen. And so that is something that I think I took away from it is that you have to be ready so that when an opportunity does present itself for you to buy something, you want it to have the dry powder to be able to pull that trigger at that time is very important, especially with the volatility that we’re have seen in, in 2020, and have been seeing in 2021 as well. So there’s certainly been a lot of that as well. All right. Let’s move on to the next question. So I have Hey, David, Andrew great podcasts this week; as always, I would like to know your thoughts and others as to why you seem against Disney.

Dave (09:56):

I understand their old way of making money, movies, parks, et cetera, has damaged quite bad weight last year—no doubt about that. I would call them quite innovative as they have launched Disney plus. And it has been quite a hit from the start. They are getting many subscribers on membership, and that seems to be constantly growing. If you compare them to their closest competitor in the market, they’re quickly catching up to Netflix. This is only one revenue stream of their business with everything shut down last year, they have taken a hit, but you hope it will manage. The company will cut costs as revenues would be down for the person attractions temporarily just wanted to bring them up as you seem to be coming up in podcasts as stocks to sell. Thanks in advance for your thoughts as to why I’m wrong in his thinking. Hi, Andrew, what are your thoughts on Disney?

Andrew (10:45):

I’ve got lots of thoughts. So Disney has been a long time holding of mine. I first recommended it and purchase it. And the eLetter in March of 2016, I bought in at 95, it was 95 31 I bought in again in March of 2020, a 117 65. And I sold out in December around one 47. So Made a decent profit

Andrew (11:14):

Continue the rise since I’ve sold. But I’m happy with the decisions I made, and I’d have my reasoning for them. So, you know, people who’ve been following along for a while. They understand I have some hard and fast rules—two of those that Disney happened to break. So one of them is if a company stops paying the dividend, I’m going to sell Disney, did that. Number two is if a company has negative earnings for the year, I’m going to sell Disney did that as well. And so for me, there wasn’t much like hem high in on whether I was going to sell this thing or not. It was a cell. And that was, it was very easy for me to make that decision. Now there’s a lot of other factors when you talk about what happened with Disney in particular, and now I don’t want to steal your thunder again, Dave, but let me, let me start with the impairment.

Andrew (12:14):

I think Dave can give a good outline of the different segments. And I know he’s, he’s, he’s looked at Disney for a while too, and he understands the business. So let me, let me talk about their big loss. So obviously, they had to shut parks down, and yes, it’s true that they, they furloughed employees. They cut costs to the bone. You know, they limited the losses as much as they could. So, in years where they would have strong profits from the parks in 2020, they lost money. And it was to the tune of $81 million, which isn’t, that’s not terrible. They caught costs well for that, but that’s a huge hit to their income compared to how much they usually get. And so not only did that happen where profits almost halved for the whole company.

Andrew (13:06):

So that’s, that’s a pretty big deal. They also took an impairment charge. And so what that means to, to, to put it in layman’s terms, basically they realized that money that they had invested in the company is not worth as much as it was when they invested it. So if we were the pretend, you know, w we don’t know the extent of what this write-down was necessary to the detail, but, you know, let’s make an illustration, let’s say Disney made a brand new roller coaster. They spent, I don’t even know how much that would cost, but let’s say they spent like $2 million to build this new rollercoaster and, you know, turns out nobody ever wanted to ride on it. And so it was $2 million that was completely wasted. So they took $2 million of their profits reinvest in the business. They were expecting that to earn, you know, much, much more than that.

Andrew (13:58):

It didn’t. And so instead of that, $2 million stayings as an asset on their balance sheet, right. Which is going to provide them with profits, you have to write it off. You have to take it off the balance sheet because it’s worthless. And so you do the same thing that’s, that’s how like an asset write-down works. And so if you think about, you know, it’s not to say that nobody’s ever going to come to a Disneyland park again, but if you think about the mechanics of running something like that. You know, whether a rollercoaster is being written on or not, it’s, it’s rusty now. It’s, it’s, it’s deteriorating stuff deteriorates over time, right? I’m not a rollercoaster expert, but you have to think that way when you look at these long-term assets. And so for Disney, they took a $5.7 billion impairment.

Andrew (14:46):

That’s $5.7 billion of money that they old profits that they used to re that they already spent. And they built up their company on that’s now essentially worthless. And they have to, they take that loss and, and, you know, it’s, it’s, it’s shareholder value that was eliminated. Of course, it’s not entirely their fault. That’s just kind of what happened. When I look at investments from a long-term compounding perspective, I want to see that slow and steady. We make some money; we put some more money back into the business. We make even more money; that’s growth. We put some more of that in the business, right. And it just builds over time. And I’m not; I’m not in the game of like huge drops and huge recoveries and kind of like a roller coaster. I’m not in that game. I’m kind of; I like the slow and steady build and compound over time. And so for me, it’s just not, when I’m the kind of investment I’m looking for. And so I was fortunate to get out at a pretty nice profit. It’s not to say that the company won’t do well. I think the company is fantastic. And I think they will recover. And I think they will be very, very strong for many, many years, but it’s just not the type of investment I’m looking for. And so I sold it.

Announcer (16:06):

What’s the best way to get started in the market—download Andrews ebook for free at stockmarketetf.com.

Dave (16:16):

Yeah, those are all great reasons. And thank you for not stealing my thunder quite yet. I’m sure you will, in the future. Anyways, so here, I guess, are some of my thoughts on Disney. So I’m coming at it from a completely different angle than Andrew is. So I was fortunate enough to buy the company at some of the lows they had in March when the pandemic began. So I was, this is a company that I’ve wanted to own for a long time. It had been on my wishlist for quite some time, but my reason for buying the company was I was looking at it as an investment for my daughter. When I think of my daughter and starting to set up, a legacy fund for her was creating something that I could give to her 15, 20 years from now. And say, here you go, honey, thank you.

Dave (17:05):

Welcome kind of thing. And it, to me, it was it’s, it’s a, it’s a brand that is going to last for a very long time. And so my take on the company was I was buying her for more emotional reasons than necessarily a stock-picking perspective. Now, at the time, I guess I didn’t realize the ramifications of what was coming as far as what was going on with COVID and how that was going to impact the financials of the company. For sure. And I’ll be honest with you, as soon as I discovered and realized that the parks were going to shut down and how much that was going to impact the revenues and the financial standing of the, I did have a couple

Dave (17:50):

Of old, gosh, what did I get into ideas? I think of a hundred dollars a share and about $89 a share because I bought it. So my cost basis was around 95 bucks a share. And so I’ve done very well on that investment since I bought it because the stock, you know, in true 20, 20 fashion has gone to the moon when in reality, it probably should have. But when Andrew talked about the impairment and some of the other downsides that the company has had, like the question was, they’ve also had some bonuses. So Disney plus has been a huge success for the company, far exceeding their expectations. I believe they crossed the hundred million subscriber list total not too long ago. And they were predicting when they first started Disney plus they were hoping to get, I think it was 62 million in the first three years of the service being offered.

Dave (18:52):

So they far exceeded their expectations. And Reed Hastings, who’s the CEO and owner of Netflix, has commented several times recently about how successful the company has been in promoting and executing its operations with Disney. He has mentioned several times how impressed he is with how well they’ve done. And as he put it, people love stories, and Disney has a lot of great stories. And you think about all the different items that are in their catalogs. It’s mind-boggling, and they have done a fantastic job of creating a fantastic product with Disney plus. And they’ve had a couple of huge hits this year with the course, the Mandalorian, and now there’s a Wanda Vision. And so those two have taken off. Plus, some of the buoys they’ve released with belong and soul most recently did very well.

Dave (19:50):

And Raya has had a little bit of a lackluster start, but hopefully, it’ll pick up. So I am not, I guess, bullish bearish on the company. I’m more a little realistic on it, but some of the things that Andrew talked about are right on the money, and the segments have done. When you look at Disney’s segments, Disney is not just kind of a one-trick pony. They have a lot of different, I guess, revenue streams. So you think about Disney plus in the media. That’s one part of it. The parks are another part of it. Then they have the merchandising part of it. So they have different aspects of revenue for the company. And the one that’s taken the biggest hit has been by far has been the parks. And even, even this last quarter, when some of the parks have been open, they still had a loss on revenues for not revenues, but for earnings for the quarter, for the first quarter of 2021, they have had losses on the park rev.

Dave (20:50):

The park segment, the media has done very, very well based on what’s being going on with Disney plus Disney plus has even done so well that there are, they’re going to be raising prices on the subscription going into, I think the second part of 2021, which will help even more increase the revenues. So the company is in pretty good shape. They did do some bond offerings to raise money during last year. So that’s helped them kind of get by through the year as the parks have been shuttered. I know that California, that they have just recently opened theirs. And I believe the one in Florida has been open for a little while now, but even they’re still down, and it’s not going to be a hundred percent capacity. Still, I did hear on the news a few days ago that California’s park is already booked two weeks out for people to come.

Dave (21:45):

So I think there’s a lot of demand for this. So I think people are anticipating that once it’s open, things are going to explode, but kind of to get back to the, I guess, the fundamentals of the company. If you look at the company, the company is about four or 5 billion below where they were at the same point this year for quarterly revenues. So if you just look at, if the parks come back to even just where they were a year ago before the pandemic hit, then the price has kind of gotten ahead of it a little bit. And if you look at just this, the earnings per share, and compare that to the price, that would kind of give you the PE, and if you did that right now, the PE would be around 30, 30, $1, or 30 31. So it’s, it’s a little bit on the high side for me. I would say it’s overvalued, but it’s a little more on the expensive side that I would want to see if I was making an entry investment, but I think the company will do well over the long period.

Dave (22:49):

So I have a different, I guess, a different mindset, plus I got in so cheap that I’m, I’m all about it. So I guess those are some of my thoughts on Disney. Did you have anything else you wanted to add a Disney? You make, you make good points.

Andrew (23:05):

And I think wall street has reacted positively to essentially a lot of the bigger moves that management has made because they’ve shown that they’re going to kind of focus more on Disney plus, and then invest in that versus some of the other stuff, which is a lot more capital intensive. You made a good point when we when we’ve talked about this in the past. So how the parks themselves are of great value to the Disney brand. It’s almost like a whole ecosystem. You have the TV networks, right? The ESPN, the ABC, and they’re able almost to have free

Andrew (23:46):

Advertising, further their parks, and the streaming. They have the movies and it all; it all kind of works together to get people in their ecosystem. But when I think of a company like Coca-Cola, if you S if you study Coca Cola, you go back, which by the way not only were they Warren, Buffett’s one of his greatest investments of all time. They’ve just been one of the best American businesses of all time, going back to the early 19 hundreds. A company like Coca-Cola took a very expensive capital-intensive business, like bottling, bottling the drinks, and letting other companies do that. And so they, even, if you look, they have a publicly-traded company that solely deals with, with the bottling for Coca-Cola and they, they have, they, they keep a small equity stake in the company.

Andrew (24:50):

So they’re able to make still sure this company succeeds. It doesn’t tarnish the brand, but all of that heavy capital intensity that comes because you got to, you know, if you’re going to do bodily and build a big plant, you have to get all these assembly lines workers. I mean, today it’s, it’s like robots and stuff, but it’s, you got to get the land. You got to get the plant; you got to get all the things that need to come together, right? Whereas the Coca-Cola brand itself, having the relationships to get into the stores. They have the advertising to get in consumers’ minds. It’s a very capital, light business. So when I look at a company like Disney, you have that there too with the parks are very expensive. I mean, the amount of money they have to put in just to maintain the parks.

Andrew (25:39):

It’s, it’s incredible. In 2019, it was something like $4 billion, and they made maybe six or 7 billion on the parks themselves. So it’s a hugely expensive capital-intensive business, but there’s no doubt that it brings value to the overall Disney brand. And so I wonder if they can do some spinoff where you take the unwanted capital, heavy, expensive parts of the business, let them sit somewhere else as Coca-Cola did, and keep the high growth that Disney plus the ESPN plus, you know, that direct to consumer stuff and keep that with maybe the movies and the TV channels. And I think you could have a huge, a huge runway from there, but at this point, we’re all speculating. You know, we w we don’t know if they’re going to make moves like that. And so it’s hard to, it’s hard to, to say whether the company is going to thrive or if they’re going to fail.

Andrew (26:41):

And I don’t, I don’t think necessarily set up to fail, but I, I, don’t, again, kind of going back to my side. I don’t; I don’t see them as moving in the path that I would want to see that I’m comfortable holding. And so, you know, that’s kind of where I’m at with it.

Dave (27:02):

That’s a great observation. I’m going to; I’m going to call up the CEO of Disney Bob and tell him that this is what Andrew thinks. And I think that’s the way we should go.

Andrew (27:12):

Right?

Dave (27:13):

Yeah. Tell him; I tell him I used to be an insider, right. Okay. I will; I will. All right. All right. So that was a great question. All right. Let’s move on to the next one. So I got, Hey, Andrew. My name is Drew, and I’m an avid listener of your podcast.

Dave (27:30):

I wanted to ask you how you began a career in finance and trading. If you receive schooling in engineering, I asked because I am a MechE or a mechanical engineer at Oklahoma State. I’m very interested in finance and stock trading. So this is direct to you, Andrew; what are your thoughts?

Andrew (27:47):

It’s a, yeah, it’s a great question. I’m not a career counselor by any stretch. And I think my circle of competence lies mostly with investing, but I guess I’ll give it a crack for me. You know, I, I, I started on the side. I mean, I started a business, and I tried to look and say, okay, what’s something I can offer here where it’s going to make people a lot more money than I’m going to charge them. And then how can I, how can I spread that message?

Andrew (28:23):

And so that’s kind of where it all came from, but, you know, I think, I think a lot of that question depends on, it depends on several factors. That’s going to be personal for everybody. Dave, I saw this meme the other day, and I thought it was kind of funny. It was, it was, it was just like this guy. And he’s like, yeah. My wife just spent four weeks checking reviews for this vacuum cleaner. We just bought it. And he’s like, and I just bought this car because the guy on TV at the same dog that I do, and you know, it, you know, it’s funny and everything, but when we think of careers, you know, how much time do we spend thinking about it and researching it. Right. When it comes to like the, when you say the word finance, I think that that can apply so many different careers and job functions.

Andrew (29:19):

And, and there’s just so many parts of that. And it’s not all trading or stocks or anything like that. And so you want to do research on that and consider what part of the finance are you doing and how what is that career path looks like, and how is that leading you towards what you’re passionate about? And then there’s even the question of, do I have the luxury to, even to make a huge career change, right? Because if I have, you know, 60,000 in debt and I’m making less than 60,000 a year, you know, and I have 60,000 down on the student loan, maybe I I’ve, I’ve got to work through that, that, and get myself more financially secure before I can make a leap to do something that I love to do. Do you know? As for me, I started on the side and, I just tried to try to teach people as I went along and try to provide resources.

Andrew (30:24):

And that happened to align with what I’m passionate about. So I don’t know if that’s a good answer, even then the answer to the question, but, you know, we, we did that. We did do a series back to the basics. And I think it was episode four where we talked about creating income on the side. And so I think, I think, you know, before you take huge steps, you have to take baby steps. And so maybe baby steps are, let me get my toes in some of these things and see if I’m, you know, see, see, see what that w what is it about this whole thing that I’m interested in, and then try some of it out without jumping with two feet completely in yet. And then once, once you’ve, once you’ve got a path, just go after it, like, like you wouldn’t believe under 10% effort and just chase after it and work hard.

Andrew (31:22):

And, and you’ll do fine no matter where you end up. I think that’s good advice. So I guess a question from the peanut gallery, me when I think about it, so this is coming from somebody who’s not an engineer engineering. I, I associate with math. Do you think somebody looking at mechanical engineering will have an interest in math because that’s something necessary to be successful in investing, is, is warning about math and, and having an interest in it? Yeah. I mean, maybe I was an electrical engineer by education, so I think there might be a little bit more math than mechanical. I know mechanical is a lot of putting stuff together, you know, like real stuff in the world, and mine’s a lot more numbers-based. So I don’t know. You know, I don’t think you necessarily need to be a hundred percent math to go into anything finance. I mean, there’s, there are so many roles where you’re dealing with people, and so that has nothing to do with math. Right. Yeah. That’s true. Yeah. I don’t know, but I also think there’s more than investing than just numbers too, but numbers definitely kind of draw you in. And I think it helps to; I think if you’re looking at stocks, it helps to, to enjoy looking at numbers because if you look at numbers and you’re like, ah, get me out of here then yeah, you shouldn’t be looking at stocks at all.

Dave (33:04):

Yeah, that’s a good point. I know that one of my favorite teacher’s professors, Aswath Damodaran wrote a really good book called numbers to Oh gosh, I’m going to blank on the name of the book. Oh, terrible stories and numbers or something are telling me about it. Yeah. Thank you. Anyway, part of what he was going after with that book was talking about people who don’t really have a number. Aren’t a thing, but they’re more about the stories. And one of the things that I know that I’ve been trying to work on is thinking about a thesis or an idea of why I think a company will do well if I want to invest in it or encourage other people to invest in it. And so I know that that’s something that I’ve been trying to embrace. And so, that’s more, more along what Andrew was talking about with more of the qualitative side of it than the number of the quantitative side of it. So there, there’s a left brain and a right brain part to investing. So I would agree with that. So that, that’s a great observation

Andrew (34:05):

And I don’t know, like you, and I think we’re very fortunate to be where we’re at and to be able to be looking at companies like this and, you know, and, and it’s, and that’s creating value for people, and then it’s able to come to an occupation. You know, there’s, there are other occupations where you think you’re going to be able to look at stocks, and you end up having to find clients or push papers, right. Or, or, or do something very menial. So it’s, it’s very tough and that, you know, I guess there’s no, there’s no substitute to just putting yourself out there and trying different things and trying to learn more and always being curious and being, trying to be flexible enough where you can make smart decisions and then pivot and, and adjust to like you, as you learn more about what it is you’re trying to do. I mean, I don’t think anybody necessarily knows exactly what they’re, what they want to do for their life. So, so what about you, Dave?

Dave (35:12):

I guess so for me, I guess I, you know, I got a degree in music and that you would think that that is as far removed from finances that could be, but they do have a little bit in common music is a very math-based art if you will. The music theory, the notes, and the chords, and how all move in conjunction with each other. And then you take rhythm and add the different pulses to all that. It can be very, very mechanical and very, very mathematical. And so when I started learning about finance, it just really appealed to that nature, part of that nature of mine. And so it just felt like a natural transition for me. And it was something that I had always sort of had an interest in, to begin with.

Dave (36:12):

Once I had the opportunity when I was working at Wells Fargo to learn more about this, I had a great mentor at the bank that encouraged me; it just really kind of took off. And it was, I was lucky. It was just one of those things that I was taken with, and like, anything else that I had done in my life, I just kind of fully embraced it. I dived in deep and embraced as much of it as I possibly could and tried to surround myself with it as much as I could because, for me, that’s when I become passionate about something; that’s what I do. Whether it’s been music, whether it’s been baseball, whether it’s been wine or history, anything that I become excited about, then I really kind of dive in, and that’s just kind of my nature.

Dave (37:02):

And I think that’s what helps me learn the best. And I’ve said this before, and I’ll say it again, it finances like a language like anything else, learning Portuguese, Spanish, French music, cooking just about anything you can think of when you dive in and try to become better at something it’s like learning a new language, and you have to learn the vocabulary. You have to learn the structure, and you have to start putting all those things together. And once you start to do all that, then it becomes even more interesting to you. And it just kind of compounds on itself. And that is how you get into something. It doesn’t have to become your whole life if you don’t want it to be, it can just be a hobby, and it could be something you do on the side.

Dave (37:48):

Not everybody is built the same way, and not everybody has the same interest. And so something that I may think is the coolest thing ever. You may look at it and go, Oh my God, that is the dorkiest geeky as the boring thing I could ever think of. And I could never, ever do that. Perfect example. I love baseball. I think baseball is the greatest sport ever. I love it. And my sister hates it or my not my sister. I’m sorry. My daughter hates it. It thinks it’s the most boring thing ever took her to a brewers and giants game. And she fell asleep in the fourth inning because she thought it was terrible. So, you know, and here I am on the edge of my seat because it’s, I’m so excited to get, to see my team play. So anyway, I think that’s if I could encourage you to do anything is whatever it is, you’re doing dip your toes in, find out if it’s something you want to do.

Dave (38:36):

And then, if it’s something you want to do, do it. Like Andrew was saying to the full extent of your energy and your ability. And even if it just becomes a hobby and it’s something that you just really enjoy doing that helps you, you know, ease your mind makes you relax, then that’s, that’s awesome too. So it doesn’t have to be; you don’t have to become a full-time stock trader or a stock picker kind of thing to embrace finance. As Andrew said, there are so many different avenues that you can take it to do with just about anything, and finance included. Yeah. Those are super good points. The problem you had with the baseball game is you were watching the brewers and the giants. I mean, I fall asleep too. Probably. Yeah. Fair enough. Fair enough.

Dave (39:26):

Well, the brewers have a good team. The giants, not so much, but yeah, the brewers had a good team. I’m sure you’re saying that there had been a Dodgers game that would have been far more exciting for her. Is that where you’re getting at? Well, maybe not because maybe they would have just completely slaughtered one of those teams too. So yeah, we got, we got our one, our one way in, okay. The first, the first world series that I’ve ever been alive for. So I have to, I have to squeeze in at least one globe publicly. That’s true. You only get; I got to get two more before you tie me. So, you know, relax the back of my spot.

Dave (40:07):

All right, folks, we’ll go with that; we will wrap up today’s conversation. I wanted to thank everybody for taking the time to write us those great questions. We enjoy answering these on the air for you guys. And we hope that you guys are getting some good information from all this. So without any further ado, I’m going to go ahead and sign us off. You guys, go out there and invest with a margin of safety emphasis on the safety. Have a great week. We’ll talk to you all next week.

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