IFB152: Hot Take – Check Your Portfolio Daily

Announcer (00:00):

You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now.

Dave (00:36):

All right, folks, we’ll welcome to Investing for Beginners podcast. This is episode 152 tonight we have a special guest with us. We have Andy Schuler with us tonight. Andy is a regular contributor to Andrew’s blog, einvesting for beginners. Andy has a lot of great articles on there, some fantastic ones that we’re going to talk a little bit about some of those tonight. So, Andrew, would you like to say hi to everybody?

Andrew (00:58):

Andrew or Andy? I mean, I guess we could go by both, right? We can go by with, Oh, welcome on Andy. I did want to ask you’ve had some great posts lately. Something that clicks with my passions. And it kind of relates not just to personal finances or investing but to a lot of different endeavors. And that’s this idea of the importance of tracking. So talk about that for a little bit and tell us your thoughts and why you’re so adamant about tracking things.

Andy (01:30):

Yeah. So tracking is, I think honestly, it’s the best way you’re probably ever going to get results just in anything. I’m a very firm believer in smart goals, specific, measurable, attainable, realistic, and sensitive. Like, and I feel like the tracking portion of actually being able to fact check how you’re doing and see your progress is the best way for you ever to make any sort of improvements in what you’re doing. So, I mean, my, I’ll say my, my introduction came to it actually when I was a kid. My dad got me an Excel at a very, very young age track and baseball stats or attracted strikeouts and singles RBIs, you know, just any, any stats that I could and just try to figure out, you know, it was more or less just for me just to see how I was doing. I could see how I did from one game to the next or at the beginning of the season to the end of the season.

Andy (02:32):

And I just liked identifying trends, and I think it picked out for me when when I was in college or ballooned to a pretty, pretty high weight in college. So I know a lot of people talk about the freshmen 15 I think I had like the freshmen 50, I don’t know if it was quite that high, but I mean it was, it was pretty obnoxious. So like if, if you’re ever looking for how to lose weight, I guarantee I can find your information that says one thing is good and doing that same thing is also bad. So I felt like the only way for me ever truly to find out what would be to track. So I mean, I would track my food and Excel. I would; I would weigh out my food. So I know I was getting exactly, you know, six ounces of chicken or I was getting, you know, if I was going to put ranch on something, I was getting the exact amount of, you know, one serving of ranch.

Andy (03:35):

But I just felt like tracking all that in Excel, and then I could see what worked and what didn’t work. You know, maybe I was eating too many carbs or not enough or too many calories or not enough or but just doing that, and tracking weight led me from dropping like 60 pounds in three or four months. I think at that point; it clicked on me. It’s like, Hey, you know, maybe there’s more to this tracking thing. Because in those four months, I was able to figure out what worked and what didn’t work better than any article over the internet could have told me or any insanity or P90X could go over any trainer that I saw twice a week. It’s, it’s the best way to be able to see what’s going on in your own life. And I think that the same thing applies to your finances as well.

Andrew (04:22):

I also have a personal experience of being very diligent about tracking food. And it was very successful for me too. I lost like 25% of my body weight because I also bloomed. So I, I, yeah, it works. I think some so many other people have examples of that I’ve met and seen and read about. So when it comes to personal finances, what, what does that look like? And I guess, you know, you can think about and look at a lot of numbers, track a lot of numbers. What have you found certain things help either with mindset or getting results when it comes to tracking finances.

Andy (05:10):

I think for me it was, you know, I almost like to use them, when you’re first starting, I like the acronym kiss KSS or just keep it simple stupid. It’s like it can be applied to so many things, but I would just get so in the weeds. I talked about this the last time I was on the podcast where I would make things so incredibly complex that it was hard for me to ever even, you know, maybe if I, if I’m talking about the budget, it was hard for me even to see where my money was going. I was tracking so many different things and breaking it into so many different categories. I was never able to find that sweet spot to get it to a point where I was going to update my budget frequently and was going to be able to track where my spending was going.

Andy (05:59):

And then I finally got to that point where it’s like when you’re physically going into your budget, and you’re tracking every single expense just by coding it, by saying, Hey, it’s food or groceries or gas or something. That’s when I was able to see where exactly all my spending was going. And that was like step one. I mean, it’s a profit and loss statement. It’s your profit and loss at the end of the month. Did I make more, or did I spend more? Hopefully, you made more. If you did it, then that’s like we’re all come back to. But the thing is if you’re not tracking it, you might never even know because now, now that we live in this world where you have credit cards, I mean maybe your debt is just going from $200, and then you overspend the next month. Now it’s 700 bucks over, spend my a thousand the next month, now it’s 1700 and you just never know. Cause if you’re not looking, then it’s just not, it’s just not knowledge out there for you. So I think that was the number one thing that got me kicked, started on my journey was like your profit and loss statement and tracking that. And then, I mean, it just, it just further snowballs into all the different things that I would track with, with my investments and whatnot.

Andrew (07:18):

I, I, there’s no excuse for it these days, right. Cause we’re all just sitting at home anyway.

Andy (07:23):

Yeah. I mean, you don’t even have to, you don’t even have to type in a password on your phone anymore. I mean, you have fingerprint ID, you could accidentally log into your credit card and see how much you owe. I mean, it’s, it’s so easy. I mean, it’s not looking at it as just, it’s, it’s all mindset. I mean, and if you don’t have that mindset, then I think you’re just setting yourself up for failure.

Andrew (07:53):

That’s so funny. I made me think of that one commercial where the guy’s like reclining in a chair, and then he reclines just barely enough so that the phone can get his Iris recognition and then he like clients back down. And so I’m picturing everybody right now, and now you’re becoming the most Hayden man on the podcast cause you’re calling this out for us being lazy. So I mean I’m super big on tracking, obviously too big on spreadsheets and stuff. For me what helped there, there were, I guess, a lot of things. You want to establish the habit first and foremost, and at least try, right? Even if it’s not your personality, it’s good to make an effort at least and try to immerse yourself in any way. And maybe, you know, it just means doing one day, one time and then maybe another day when you get bored, you try to add on to that and then you know, over time then you finally get things under control.

Andrew (08:52):

For me, I was tracking, and I would get to the end of the month, and I’d be like, crap like I ran out of money, you know, and like I had all these things that popped up, and I didn’t account for it. And so over time, and I wish I had your doctor budget tool back in the day when I first built my own a budgeting spreadsheet was just like over time I would get these expenses that I didn’t think of and then I would have to re-add them to the spreadsheet and then eventually I got to a point where I was breaking it down by calendar day. So you know, it’s like, Oh, I know rent comes out on the first. I know the internet comes out on the 10th, and then so I had eventually built this calendar. And so you just actually today released your calendar section on the doctor budget spreadsheet, and you made that available to everybody who’s purchased already. So explain that and obviously how, you know, how it’s beneficial for, for people who are maybe struggling with the whole getting results part.

Andy (10:08):

Yeah, I mean, so when you think of the word tracks, it’s all things that have already happened. I mean, at your post auditing you’re, you’re following results that have already occurred versus the budget schedule is almost like the planning phase of the budget, which I think is equally as important. I mean, it’s, it’s really like two sides to a dumbbell. I mean, if you don’t have either side, it’s just going to. I mean, you’re just going to drop it. It’s not going to be weighted. It’s the budget schedule is something that I found for me was probably the first thing that made me super motivated, and I stayed motivated throughout the entire month. So first of all, just I’ll start with just your general budget. If you think probably a lot of people are going to maybe post out of themselves or track their expenses maybe once a month at the end of the month and if their budget is 3000 bucks, they’re going to go, crap, I spent 3,500 what am I, you know, dang, I guess I’ll try to fix it next month.

Andy (11:10):

Well, by the time they attract it, it might already be a weekend in the month, and they probably haven’t changed anything in the month. I mean all their expenses are probably, you know, they’re already the weekend, and they don’t have a new plan yet. So the reason I like the budget schedule is, I truly break it up. I have, I have every fixed expense listed, so everything that comes out of my budget or out of my bank account automatically. So it’s like my mortgage, my cell phone, car payments, car insurance, automatic contributions that I might have to my investing: 529 for our son. Just make sure that’s all going in automatically. That’s all listed. That’s something that I need to plan to make sure I have enough in my account. And then I also have my income listed in there and my wife and I get paid on the same day, so we get paid biweekly.

Andy (12:07):

So it’s like 14 day periods. It’s kind of how I break it up, or you know, if you get paid weekly, you could break it up into a week. And so I might show, Hey, I’m, you know, I’m getting paid X amount. Say it’s a thousand dollars, and I have $400 in expenses. I try to keep in the back of my mind, let’s make sure I have that $400 covered. Let’s try to keep some sort of buffer in there. Say it’s another 300 bucks, and then that might tell myself, Hey, I have it. I have a surplus of $300 what do I do with that? You can keep it there for a margin of safety. You can invest that extra money. You can blow it on something if there’s something you want, and hopefully, you know, that’s like the last thing I would recommend you do.

Andy (12:47):

But I mean the fact of the matter is that I’ve noticed that breaking it up into even smaller chunks than month-long trunks keeps me motivated. And every single day I wake up and I look at my account, I go, okay, what came out this week? Or when it came out today, was it my cell phone? I’ll cross that off the list and go, okay, now I have $500 to get me through to my next paycheck, and I know everything under $500 that isn’t spent, I can then take that money and invest. So it keeps me motivated daily rather than every month.

Andrew (13:20):

Yeah, I like that. That makes sense. I mean, I know both in my personal life, you know, it seems like all my bills when they come out at the beginning of the month and then as a business owner, it’s, it’s the same thing too. And so I know like, you know, if you’re looking at as an example, two-week increments, I know that what’s left on after that second two week, you know, that back half of the month, whatever’s in there, that’s not all mine, you know? And so you have to understand that if you have it all laid out, you can know that. All right, well, you know, the next two week period I’m going to have this much versus that much. So maybe having that buffer helps you cover some expenses other on the, on the front half of the month.

Andrew (14:05):

And, and just, you know, understanding that puts you far, you know, way far beyond just kind of looking at how are I guess not even looking. Right. Well, I mean we’re talking about that too. It’s like, well, if it’s swiped, we’re good moving on. That’s not a good way to make progress. So we, you know, we were talking to, and something opinion do you have, that’s a bit controversial. And when now we’re talking about tracking your investments themselves. You have a philosophy about tracking your investment every day. And, and I haven’t heard anybody say that, so talk about that for a minute and why you think it could be beneficial investors.

Andy (14:53):

Yeah. Even so, even when I was writing this, I felt like I was like, people are probably going to think, I’m like, skip Bayless of the investing world, trying to troll and provoke and get clicks. And like I, I thought about it multiple times. I’m like, am I going to say this because 100% of the people that read this will disagree, but it’s legitimately how I felt, and it’s not how I felt initially. But the point in time where I’ve changed my opinion has been within the last couple of months with the Coronavirus, and I guess all this, I’ll just paint the picture. So ever since I’ve ever invested, I’ve always been told don’t look at your portfolio daily, not even weekly. I mean monthly if you can, if not even less often than that. And at the same time ever since I’ve invested, I’ve looked at it multiple times a day.

Andy (15:56):

So I’ve never listened to that advice. And I think part of it is just one of the things that are motivating to an investor is seeing the performance. I’m in seeing like I’m talking about this whole time with tracking like you like to see your results. That’s great when you know you’re in the middle of a ten-year bull market, but when things started looking bad, you’re going to make impulse decisions, and you’re going to sell, probably sell it. The low point, you’re probably going to buy back in at the high point. And I mean commit one of the Cardinal sins as an investor, I think, and you’re going to buy high and sell low. The point in time where I changed my opinion, as I said, is, is through this Coronavirus it’s, I mean we all saw days where the market is dropping like eight, 10% in a day.

Andy (16:46):

I mean, it’s, it’s devastating. It’s, you just see your portfolio get crushed, and you know that for some of your investments. Yeah, things probably are materially changing if you’ve invested in cruise lines or airlines, you know, things are probably are materially changing. But if you’re investing in a company that’s just kind of getting hit by, you know, like guilty by association, things aren’t changing. I mean, it’s just that companies are being devalued. Then, and maybe it’s just an opera, you know, a clearance sale, an opportunity for you to buy in. So I felt like by me looking at my portfolio daily, I felt like he was able to keep me a rational investor. Like I was used to seeing these huge declines. And I also had the mindset of I trusted the positions that I was in and nothing, you know, I would always pay attention and say, you know, have things materially changed.

Andy (17:42):

If something has material change, you know, throw this out the window you can sell. But if things haven’t material changed, your stock is just being discounted, and you have a chance to buy in cheaper. So you can either sell and panic and have the market go up or, or you can, you know, take advantage and you know, try to buy a little bit lower and sell or lower your, you know, your average position in the, in the stock. And I know if someone tries to implement the strategy, I guarantee that they’re going to panic and sell when they shouldn’t probably. But I feel like I almost feel like that’s inevitable. I mean, I talked with people at work that never check their 401k, and I know that cause I’ve asked them how often do you even look at your 401k? But when the coronavirus stuff was going on, everyone knew what was going on in the market, and I think that’s the worst time to get these overwhelming feelings of regret or you know, what do I do now? Like I felt like by me looking at my performance daily, my entire investing career, I was a little bit more sense, desensitized to the ups and downs, and was able to stay rational.

Andrew (18:58):

Yeah, that’s a very interesting take on it. It’s, it’s almost like you’re like that metaphor with the boiling crab or not the BlackRock, the boiling frog where the, you, you slowly turn up the temperature and then the frog never jumps out because he doesn’t realize how it’s getting warmer and warmer and warmer. So for you, it’s like instead of having a jump into this icy cold thing, you’ve, like you said, desensitized yourself and gotten used to volatility. And so I think that’s, you look at the VIX, you look at how stocks have moved in the past three, four, or five weeks. Volatility has been very, very high. And it’s what I hear coming out of what you’re saying is it’s not even that you’re looking at the portfolio. Who was it who said I think it was Warren buffet said, the market is not there to instruct you.

Andrew (19:59):

The market is there to serve you. And so for you, you’re looking at the results, right? You’re looking at where your portfolio is moving, but you’re not letting that instruct the way that you’re going to react. Instead, the way I interpret what you’re saying is you’re actively evaluating your positions and thinking about what’s important. And it’s not what you see on the screen, but it’s, you know, what’s going on with the business itself. And this is something that I’ve been harping about. It’s like with the Coronavirus, with this huge fundamental change that we’ve seen, all of this uncertainty, this is the time to get to know the businesses that you own, know why you own them. And try to figure out if they still look good longterm or not. And it sounds like that’s exactly what you’re about and exactly what you’re doing and by looking at what’s going on, it’s kind of forcing you to put your mind there, and I think that can be a big benefit.

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Andy (21:08):

Yeah, you’re spot on. So I do all my investing with Fidelity. When I’m looking at my portfolio performance, I am never opening Fidelity. I’m always opening Yahoo finance, and I’ve, I have a personal rule where it’s just I don’t buy or sell stocks. I make no transactions on my phone, and I just feel like just having that rule makes it, it takes that instantaneous knee jerk reaction and maybe adds in a little bit more of a step that I have to get on my computer, and I can’t log in on accident with my fingerprint. Like I just talked about the Chase, I have to type in my password, my username, and do a couple of clicks. It just, it, it helps keep me a little bit more level headed and removes that impulse decision making in a way where I’m not looking at my portfolio of daily, multiple times a day with the intent to do anything.

Andy (22:02):

It’s more just awareness and trying to understand what is going on. I mean, why is the market changing so much day to day and just me trying to become a more knowledgeable investor, and I can tell you that was not how I was when I first started investing. Like every time I did open my app, you know, when I first started, I told you guys before the podcasts, I was a Robin hood user, and I was like, I was like a day trader, you know, I was like, man, I’m going to, I’m going to get rich so fast. And I quickly realized that I was just an absolute moron. But the thing is, I learned that lesson early on where theoretically you’re probably going to have the least amount of money hopefully in the market as you will at any other point in your life. So yeah, those lessons sucked. But I learned from them, and I probably learned at the best time considering those when I had the least amount of money invested. So, the mistakes were a lot less painful.

Andrew (23:10):

So we always love to talk; at least I talk a lot about my mistakes on this podcast. Yeah, I know you do. I don’t, you know, I do my best not to put words in your mouth, so you know, but let’s hear about some of your mistakes. Just from coronavirus standpoint, I think it’s good to hear we’ve, we’ve had what we’re recording this May 14th, so we’ve had a little bit of time. I think we’re; we see a huge shift in everything. Who knows how long we’ll continue to be locked down. Who knows how long the market will kind of behave like it’s been behaving. But talk about some of your mistakes. Talk about some of your successes and whether the things you’ve learned post coronavirus when it comes to stocks and how that relates to tracking things every day and everything like that?

Andy (24:07):

Yeah, I mean, I think one of them, the biggest lessons I’ve learned is just because a stock is discounted doesn’t mean it’s cheap. And it can mean the exact opposite. I mean, as you see, earnings are dropping. I mean, just because the price is dropping, your earnings might be dropping a lot faster than what the stock price was dropping. So I remember seeing a tweet when I first when all kroner buy, her stuff was happening, and it was, it was like today’s value investors are buying zoom and Buffett is buying the airlines. And I was like, my thought was I was like, you know what? I’m going to; I’m going to buy both and just see what happens. So like I bought a jet ETF and obviously with all the news about Buffet, I was like, man, it’s, it’s clear. I’m still, you know, still learning and still adapting my strategy. But that was the hardest thing that I learned is there’s a difference between price and indifference between value and you, you need to make sure you’re constantly staying on top of it and evaluating how the business is changing. So, you know, it’s funny, I texted one of my friends today, and I said, do you ever just look at a certain stock every day and hate yourself for buying it?

Andy (25:19):

And he responded. He said, yeah, when I bought into canopy growth and I was like, yeah, I don’t know why I bought this Jet’s ETF and w you know, we just kind of laugh about it and we’re like, you know what? Probably a mistake. But it’s something you learn about, and you move on, and you try to make, make a better decision going forward. You know, I don’t normally ever really invest in ETFs at all. So it was probably just something I got caught up in the moment and whatnot. But then, again, at the same time, I mean it’s, I think we found a lot of, you can find a lot of businesses that, that are on sale or you might not, you know, they might not be necessarily directly impacted, or they might begin hit with some of these tailwinds or, you know, I, I know we’ve talked about Disney before. Still, I mean, Disney has pounded pretty hard, and I think a lot of that was short term where, how, how do you anticipate the coronavirus trends going? Is this going to be, you know, multi-years what’s, what’s your investing timeframe if you’re, if you’ve got another 30 years, I mean, you’re, are you concerned about the parks being closed? I don’t think I am. I think it’s just having that, that sort of mindset.

Andrew (26:31):

But what about Dave? Let’s flip it on, Dave. What’s that got going on with his portfolio lightly?

Dave (26:39):

Well, my portfolio has been hammered pretty hard because I’m in a fair amount of banks and financials. After all, that’s one of my areas of passion, and they have not recovered as much as everything else has. It has been a little bit brutal, to be honest with you. I’ve had a few companies that have done okay, but I’ve had a few that have taken a good whacking. I don’t know that to kind of speak to a little bit about when Andy was referring to the price has changed a lot, and I don’t know necessarily that the fundamentals of the bank have altered that much yet. And I saw somebody on Twitter talking about this a couple of days ago on it, and I thought it was kind of appropriate. He said he felt like the people were still hammering banks for what happened in the last financial crisis even though this one that they’re not responsible for.

Dave (27:36):

And it kind of feels like when I look at my portfolio, and then I compare it to the S and P 500, and I don’t know exact numbers how far off we are from the highs. Still, it’s getting back to the point where it’s sort of almost even now where it went down, and I’m still down 15 20% for the year because of the companies that I own are still not recovering back with them. Partly because I think for banks particular, there’s still a lot of unknowns about what’s going to happen with defaults on mortgages, defaults on credit cards, defaults on car loans, and all those kinds of things. And that’s where a lot of the money that’s tied up in banks is tied up, and those are unknowns. And so I think people are, are afraid that those are going to get hammered. There’s also been, the earnings for banks have been low because they’re taking all their money that they’re making and setting it aside, anticipating loans, you know, being affected quite a lot.

Dave (28:43):

So you know who, who knows there have been, there was one company that I did buy that a couple of months ago that I thought would kind of withstand this pretty well, but it is not done well at all. And it’s down 60% since they bought it. And you know, I’m hesitating on whether I want to just cut bait with it or if I want to just stick with it or even dollar cost average with it some more. I’m still kind of him hauling about that one in particular. But you know, it’s, it’s, it’s all the same things that Andy was talking about. I try not to look at my portfolio every day, and I have everything that I own on a stock screen with seeking alpha, and I use that to check it. So like Andy, I think he is a brilliant idea that he had not to look at his stocks on his brokerage because then he creates speed bumps for himself to make An impulse decision. And I, I try to do the same thing. I’m not always successful with that, but I do try to always look at it on seeking alpha so that I have to go an extra step before I pull a trigger on anything.

Andrew (29:55):

I don’t know. So you know you mentioned this idea of you know, you bought some bank stocks and then this whole thing happens and so obviously they’re going to have a couple of years of lower profitability because they’re going to have to deal with losses from loans. You know, having not to be able to grow their earnings because they’re not able to loan out a lot of money cause they’re putting out reserves. I know, I don’t know why this popped in my head today but have you ever heard the saying where they say, and this is very prevalent among value investors too, I think especially value investors where they say if the stock, if you’re not willing to buy the stock at this price, then you shouldn’t be willing to hold it for that.

Andrew (30:45):

I think that’s so dumb because you could have stock in a situation where you could own the stock for like three, four, or five years. You could be getting like a 10% yield on costs on this. So you tell me, where else are you going to take your investment? Find a 10% dividend, you know, that has the chance to continue to become more valuable over time. Where are you going to find that? And so I think when the thought process turns into, so I do not mean to pick on a new day, but I’m just saying like as an example, we’re, we’re looking at a situation where you bought a stock. Okay. And then I think it’s very; I think we can all agree that with all the developments that have happened in the short term, that business is not as valuable as it was when you bought it.

Andrew (31:37):

You know, they’re going to have lower earnings for several years. And so for the stock to drop 15% you know as Andy said, it doesn’t mean it’s cheap. Just because it’s cheap doesn’t mean, what did you say? Just because it’s cheap doesn’t mean it’s a good value. So, you know the stock price has followed the fact that the business is now less valuable over the short term. Still, at the same time where you bought into it you secure a certain yield there, you, you secured the idea that there’s going to be dips and temporary setbacks in the business, right? So you’ve kind of factor that in so you wouldn’t, you wouldn’t necessarily sell because you kind of were looking at the longterm anyway. But at the same time, you might not necessarily buy more because if the, if the stock market did not bid the stock lower than what the actual worth is with the information we have right now, then you know, maybe it’s not a good buy anymore.

Andrew (32:48):

So I think those are other thoughts that we can have where if you’re looking at the super, super long term and the things have fundamentally changed, like to pick on the airlines and cruise ships you know, that it’s kind of up for debate. People, for whatever reason, get heated when you talk about those two things. But you know, at least the way I perceive it and the fact that, you know, they’re not paying dividends, that changes things a lot. But you know, you could have another company like a bank where maybe it’s just more of a short term thing, but you know, the way that consumers are going to be banking is not going to change in five years. And so it’s different, it’s a different kind of thought process. And that’s a different, maybe way to think about, well, just because you don’t want to buy more here, it doesn’t mean you necessarily want to sell.

Andrew (33:45):

I think taking those decisions independently, especially at a time like this is very important because it’s, it’s, it’s difficult when you have a portfolio that you’re watching go through this and like the impulse, trust me, I know this impulse where you just won’t want to tweak. And so for me, having to recommend the leather and have one issue come out every month, I’m able to have these ideas or like, yep, I’m going to sell that stock. And then like two or three days later I’m like, you know, I get clarity on it, and then you think it over more, and then you realize, Oh, okay, that wouldn’t have maybe been the best decision. So for me that, you know, I’m checking a lot more frequently now because of everything that’s going on, but I’m on like a tape delay of like once a month making these major decisions. So that, that’s my way of kind of navigating through this by kind of trying to change the mindset, challenge some ideas that have kind of been commonly accepted and then really have these actions that are spread out, and you put these speed bumps in front of you so that you don’t make dumb decisions.

Dave (35:01):

No, I think that’s, I think that’s exactly right. And I agree with you and me; I try hard to think about some of the positions that I have and have things fundamentally changed with the company and how the company is going to perform six months, a year, five years from now. I don’t think the minimum the majority of them, I could be wrong, but I don’t think that that’s going to change. And so that helps me feel better about the position I’m in. With some of them, you know, a couple of them are our retail companies that I try kind of step out of my comfort zone and try to learn more about them. And so those have struggled mightily, but one of them had to be cooler. I think we’ll rebound. It just may take a while just because of the nature of the brands that they represent. But it just may take a while for them to rebound. But you know, well, we’ll see how all that happens. But I’m curious how Andy thinks about any of those kinds of things we were just talking about.

Andy (36:01):

I agree. I mean, I think you guys were both spot on. I think it’s all just about understanding what your time horizon is and your mindset. I mean, for instance, you know, I think probably the best example I can think of is right now with oil companies that they’re kind of, again, you know, pounded from both sides with demand is down drastically because people just aren’t going anywhere. And then also the price of crude oil is, you know, the, what the June features once a negative $37 for that last closing day. So I mean it’s, you know, that was a one-day thing, but I mean just crude oil pricing is a lot, a lot lower than what it has been historically. It’s, but so then, then to me, I mean, if I were ever looking at a company like that, I would ask myself, okay, are these things that are here to stay forever?

Andy (36:50):

And the simple answer in my eyes is no; I do not think that our driving season is going to be, you know, demand is going to be cut as much as it has. I think people, you know coronavirus stuff will subside eventually, you know, knock on wood and people will start to resume their normal driving patterns and shipping will go back to normal. And you know, if you look at the price of crude oil it’s, it’s pretty cyclical. So do I think eventually that that, you know, it will continue to be cyclical or do I think it’s going to stay down in the range that it is now and then also just looking at some more, you know, big picture things are okay are you know, is it coming, you know, right down the road or is that going to be, you know, a longer-term solution to, you know, some of our, you know, saving the environment. I mean, are we going to have a lot more time than I could invest in a company now that’s being priced at a pretty big discount because of everyone’s pricing in at the value of the company today. But I don’t care what the value of the company today is. I’m going to be looking at the value of the company 10 15 2030 years out. So I think it’s all just about looking for Clarence buys now in that sort of sense, which is exactly what you guys hit on as well with the bags.

Dave (38:07):

Yeah. And one thing sorry, one thing I wanted to kind of follow up with what we need to do was talking about, because of what’s happened with a Coronavirus and the effect that it’s had on a lot of companies, I’ve spent a lot more time analyzing how companies reacted to the crisis backup no seven throw nine and trying to kind of project forward again how the companies will react to that. So you can of getting An idea of how companies reacted and it kind of give you a, for me anyway, it gives me a comfort level of knowing that Hey, you know, this company here survived this downturn, which would have been far worse in the long run for that particular company than something that’s happening now. And it helps me kind of clarify my thoughts a lot.

Andrew (39:05):

I’ve done the same thing to no; I’m serious. Like some businesses are just more cyclical than others. You know there is a business that could be cyclical and could be kind of in a commodity swing, but the way they structure their business could still be decently profitable even during a time where it’s not as nice for them. It’s worth checking out. So let’s say we’re investors, we want more money to invest and we just, you know, we’re not sure where all our money is going. Tell us, Andy, about your doctor budget tool. Tell us where to find it and why it could help find more money to invest in the stock market, hopefully, not through your Robinhood app.

Andy (39:52):

No, I will not send you guys a link, or if you sign up now, we both get one free stock, but now you can find the doctor budget that the doctor budget.com. You know, I talked about it a little bit on this podcast. Still, it’s just all about finding that that personal cashflow and, and tracking and when you can actually track your expenses and your income until there’s seriously no better feeling than ending a month with a hundred extra bucks—and then being able to put that money into maybe your Roth IRA or a five 29 for your, you know if you’re trying to pay for your kid’s education or anything like that. And then just pulling up some sort of compound interest calculator and just seeing how much that can truly change your life. I mean, for just, just for the heck of it. I’m kind of, while I’m talking, but it’s like a hundred dollars a month. It doesn’t seem like much. I mean, especially if your expenses are $3,000. I mean, that’s a few Starbucks that’s maybe eating out, you know, a couple of fewer times. It’s not some sort of major life-changing decision that’s going to be able to set you up and get you that much closer to your retirement goal.

Andrew (41:15):

There is something better than, I’m finding a hundred extra bucks in your account at the end of the month or the one you took my joke, nevermind.

Andy (41:29):

Yeah. So a hundred bucks a month for 30 years that you know, at 8% pretty conservative return $147,000 in 30 years. And I know people get, people get triggered and upset about those types of things. But going off, you only rice and beans, you know, you can retire in X amount of years cause it is about quality of life too. But I think I don’t know if you guys are familiar with Rameet Satie he says, you know, spend extravagantly on the things that are important to you and cut everything that’s not, and I think that’s the mindset that you need to have when you’re using the tool. And that’s why I love the doctor budget. You can customize it however you want. If you want your $4 Starbucks every day, that’s fine. Put in $120 a month for Starbucks, you know you’re going to spend it. It is what it is. Cut that money out of wherever else it is. Maybe you don’t need a car. Maybe you don’t need a gym membership. You’re inside; you’re just going to run outside for, you know, June through August. So you have that full customization to be able to build your own investing in personal finance plan however you want. I mean it’s, that’s why it’s called personal finance. After all, it’s really up to you, too, to decipher how you’re going to get to your goal and decipher what your goals are.

Andrew (42:45):

I guess I’ll; add one last thing. I never saw the results. I mean, you know, obviously you, you do what you can and everything, but tracking and having a spreadsheet, that’s when I did it. Right. So I highly recommended it, and I think the doctor budget is a fantastic tool to get you there. I agree. I’ve been using it since Andy released it and it’s been fantastic. I have enjoyed it. I’ve learned a lot. It’s been very helpful.

Andy (43:15):

I appreciate the kind words, and I’m working on, you know, I’m continuing to add more iterations to it as well. So, you know, I know Andrew talked on the budget schedule that I just rolled out too. But I think it’s; it’s, it’s really important just to stick with the meat and bones of what it is now. It’s, I mean, it’s like budgeting is just, you know, it’s, it’s all about a mindset. It’s like the people that view a budget as a hassle, or too time-consuming, it might be too, too time-consuming, but chances are it’s probably just the mindset. They don’t want to look at their fences, finances; they don’t care what their spending habits are. And you know, the sad thing is by the time they get to the point in life where they’re focused on their finances, you know, they’re, they could be years down the road where they’ve lost all those valuable years of compound interest.

Dave (44:06):

All right, folks. Well, that is going to wrap up our discussion for this evening. I’d like to thank Andy for taking the time out of his day to talk to us. That was very valuable, and it was great, and I agree with him. If you do not track things, you will not see progress, and that’s a great way to keep track of how you’re doing with things, whether it’s financial like we focused on today, whether it’s weight, whether it’s anything you want to do, the spreadsheet guys are right. It is very helpful. So without any further ado, I’m going to go ahead and sign this off. You guys go out there and invest with a margin of safety emphasis on safety. Have a great week, and we’ll talk to You next week.

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