Getting to Know Tom Plumb with Wisconsin Capital Management

Episode Transcript

Speaker 1 (00:05):
Thirteen ten WIBA and Ask the Experts. Really excited this
morning to welcome a new guest to our program, Tom Plumb.
Tom is a CFA with Wisconsin Capital Management. You can
learn more about Tom, as well as Wisconsin Capital Management
all on their website whiz cap dot com. That's all
one word, wi scap dot com. This kind of rolls

(00:26):
off the tongue nicely. Tom, How you doing this morning?

Speaker 2 (00:29):
Well, I'm doing wonderful, Sean. It's great to have a
chance to chat with you, you.

Speaker 1 (00:34):
Know, it's fantastic to finally get a chance to do
this on the radio. You and I have had a
chance to meet the past couple of weeks and talk
a little bit, get to know each other, and really
excited to get the opportunity to share with folks a
little bit about you and what it all is that
you do at Wisconsin Capital Management. Before we get rolling
kind of into the specifics, let's kind of do a
little bit of a background. I know you've been in

(00:54):
the financial industry for over thirty years, and I wonder
kind of what brought you into this field and what's
kind of your background there, Tom, Well.

Speaker 2 (01:05):
I joined this business basically for two reasons. One, I
wanted to positively impact people's lives by helping them you'll
navigate through the really critical issues of financial security for
themselves and for their families. And secondly, I really like
to analyze complex issues and distilling them down to actionable items.

(01:30):
And there's very few things as complex as economics and
financial market interactions.

Speaker 1 (01:36):
You said, that is for sure, and that was one
of the things. As I mentioned at a chance to
meet with you before we start doing the show, I said,
this guy's really good at kind of kind of distilling
things and really getting things nice and concise. So let's
talk a little bit about the history of the business,
Wisconsin Capital Management, and of course your role in its evolution.

Speaker 2 (01:56):
Well, sure, Sean. We started this business with some partners
in nineteen eighty four and basically we manage investments for
wealthy individuals, pensions, profit sharing plans, foundations, and many clients
liked how we manage their retirement accounts, and they asked

(02:17):
us if we couldn't have some type of ability to
handle smaller pools of money. So we started a balanced
mutual funded balance means both of philosophy, but it also
means an allocation on how you distribute assets when you're
managing a portfolio. Started that in nineteen eighty seven, and

(02:40):
then I started a trust company in the year two
thousand because we thought that was really important to not
only provide good investment management services, but have it apply
to people's individual lives. We sold the trust company in
twenty nineteen, and then Nathan Plumber and I decided to
focus on analysis and portfolio management for our mutual funds

(03:04):
and from high networks individual.

Speaker 1 (03:06):
It's fantastic Nathan Plumb, same last name. I'm gonna guess
there's a relation there, isn't there. Tom.

Speaker 2 (03:13):
I've been very fortunate that the best person I've had
to work with in these forty years is my son Nathan.

Speaker 1 (03:19):
Well, that's great, real quick too. I was Gon, I'm
gonna ask you a little bit about kind of you know,
seeing the different cycles. But before we get to that,
a little bit about that is one of the great
things about Wisconsin Capital Management and how you're structured. You
mentioned your son Nathan is one of the things I
think a lot of folks think about with investing. Obviously
thinking long term, they're going to say, you know, wondering

(03:41):
are they going to be here in twenty thirty forty years.
One of the great things with what you're able to
do with you and your son is you're there for
the long haul. So people that develop relationships with Wisconsin
Capital Management, now this is something that we talk about
all your expertise and of course working with your son,
this is really something is that you're going to be

(04:01):
there for the long haul, isn't it.

Speaker 2 (04:04):
That's the whole purpose. We've tried to work with other
partners and with other organizations, and we realize that having
a continuity of the not only the management the processes,
but the philosophy and how you allocate your time and
what you think about how you should relate with your clients.

(04:27):
We wanted to make sure that we had a structure
that would keep going and that we were in control
of so that there wasn't a situation where we merge
with some other company and all of a sudden they
have complete different goals on client service and portfolio management.
So this is a great thing for us. I tell

(04:49):
people that I'll continue to do it with Nathan as
long as as long as he thinks I'm an asset,
as long as my clients think I'm an asset. And
as long as I'm able to do something like this
that I really enjoy doing with people I enjoy doing
it with, and then I have an opportunity to talk
about it with people like you, Sean. So it's the

(05:11):
best of all worlds for me.

Speaker 1 (05:13):
Well, it's great to get to get you on the
air this morning as we talk with Tom Plum CFA
with Wisconsin Capital Management. You can learn more about Tom,
you can learn more about Nathan. You can learn more
about Wisconsin Capital Management all on their website whizcap dot com.
That's Wi scap dot com. That's wiz cap dot com.
Of course, this is asked the experts here on thirteen
ten Wi b A. Get to know Tom and a

(05:35):
little bit about Wisconsin Capital Management and Tom also one
more thing before we get to get to the next
thing about about kind of managing thing through market cycles.
You mentioned also kind of your personal drive, and of
course you talked a little bit about your history having
been involved in this in this world for over thirty years.
You are you are somebody, this is you live this stuff.

(05:58):
This is this is like like deep almost deep in
your DNA. This is really something you love doing, isn't it.

Speaker 2 (06:04):
Oh yeah, if you ask Nathan or anyone else what
our tele dinner conversations are, what our breakfast conversations are.
It's first thing in the morning, checking the markets, checking
on what developments might affect the markets throughout the day,
talking about the activities, and then more importantly, putting it

(06:27):
into the perspective of longer term issues. You know, we
we watch everything that happens every single day, every single
hour of the day, but it's really developing that perspective
to put it into context of the longer term and
what you're trying to accomplish.

Speaker 1 (06:45):
Let's let's kind of look then as you talk about
kind of long term and having the opportunity to look forward,
and of course having the opportunity of experience. Obviously, there's
been some lessons learned over the years for you, kind
of what's that biggest lesson you've learned from managing money
through different cycles and having seen a really a lot
of a lot of different market behaviors. What's kind of

(07:06):
the biggest takeaway for you are the biggest lesson?

Speaker 2 (07:08):
Tom Well, First of all, you know, Wall Street is
very good at developing products that help Wall Street, and
they usually by the time a trend is identified or
a correlation or something like that, and they come up
with a product for that. Often it's after the fact.

(07:29):
But the couple fundamentals that stick with the markets throughout
cycles is that if you have companies that can grow,
can identify them, watch them, make closely, make sure they're executing.
That is a way that stocks can add value from
our perspective. If you can find companies that where the

(07:53):
management understands their environment, has a great balance between their clients,
their customers, their employees, and the overall environment, and then
can execute a growth plan. That's the way that you
compound and add value the stock market. There's many different
tools that people come up with about managing risk, but

(08:16):
the one that has worked consistently through all cycles is
that if stocks can provide you the most return of
an equity investment, a publicly traded equity investment over time,
they're volatile. So modify that volatility by having something that

(08:37):
can offset it, and that usually and intuitively has been
high grade short term investment bonds. Fixed income can moderate
the volatility of an overall portfolio and allow you to
become a long term investor. And the real key thing
is to fundamentally understand why you're investing. Look for investments

(09:02):
that can grow because the eighth wonder of the world
is compounding and time. And so for our perspective, you
look for growth companies. You look for well managed companies
and how they execute.

Speaker 1 (09:17):
That is great to hear as we talk really really
interesting stuff this morning with Tom Plump CFA with Wisconsin
Capital Management. You can learn more about Tom and the
team all online whiz cap dot com. That's wiz cap
dot com, that's wis cap dot com, wi s cap
dot com. Getting some market and economic insights from Tom

(09:37):
this morning, and now a day goes by. We're in
our very news here on thirteen ten wib I don't
hear a story about interest rates? Obviously they've been a
very hot topic. How are they impacting investment strategies these days?

Speaker 2 (09:51):
Well, you know, definitely, interest rates are modestly, modestly restrictive
right now in today's environment. There when you have in
interest rates that are you know, short term rates around
four percent, longer term rates of four and a half percent.
When interest rates are two to three percent over the
embedded inflation rate, that's modestly restrictive and that's where we

(10:15):
are right now. But the calls for rates to dramatically
come down, you don't want to see that. When rates
come down dramatically, it's because everything is hit the fan.
And what we do want to see is a predictable
environment that is not structured to stop the economy. And

(10:37):
why that, I mean the Federal Reserve Bank has many
times decided that inflation was too high and they raised
interest rates dramatically and that puts everything on hold. So
right now modestly restrictive, but still allowing growth in the economy.
So selectively, I think you can find companies that can

(10:59):
enhance your PORTFOLI.

Speaker 1 (11:00):
Talking this morning with Tom Plum, he is with Wisconsin
Capital Management, talking a little bit about the market and
economy or else going to get into a little bit
of Tom's investment philosophy as well as some other planning
and advice as we talk on Ask the Experts this
Morning with Tom Plum, CFA with Wisconsin Capital Management. You
can learn more about Wisconsin Capital Management on their website

(11:22):
with cap dot com that's wis cap dot com. We
also put the podcast out right after the program. If
you've missed any part of the show, you can always
listen back to the podcast on any platform. Just type
in Wisconsin Capital Management and you will find that podcast
and Tom as we kind of get into some of
the sectors and other themes. What are some of the
ones that you're seeing out there that you're most optimistic

(11:43):
about in the next year, eighteen months or so.

Speaker 2 (11:49):
Sean, We are in a time when there is an
incredible amount of innovation and change in how we pay
for things, and the old rules about currency, paying with cash,
paying with checks, those things are disappearing, and we're even
seeing things like tokens and stable coins. The financial service industry,

(12:12):
those companies that are providing innovative solutions are paramount to
the changes that we see about world economic activities. So
those companies that are leaders that are allowing you to know,
for example, to use a credit card a debit card

(12:33):
in so many different fashions. You can use your phone,
you can tap it, you can insert it. But that
is only the beginning of all of the changes that
are going through in the financial services industry and how
we purchase things. We think that secular trend is going
to continue to drive some incredible growth opportunities, not just

(12:56):
for the next twelve to eighteen months, but probably for
the next years at least.

Speaker 1 (13:01):
That is pretty amazing. I know when my wife and
her friends go out go out to braunch your dinner,
they always use little apps and they're sending each other money,
which I always find like that is just amazing that
that stuff goes on. There are some absolutely amazing tools
out there. And speaking of technology and some great tools,
I hope you had a chance to check out the
website whizcap dot com. That's wis cap dot com. You

(13:24):
can learn more about Tom and the team at Wisconsin
Capital Management, learn a little bit a little bit about
their investment philosophy and other things as well. Again that
website whizcap dot com. That's wiscap dot com. Of course
talking with Tom Plum with Wisconsin Capital Management. You may
recognize Tom's voice if you are a regular stener of
Bloomberg and other things. Tom's been featured on those on

(13:45):
their programs several times as well. Great to have them
along here. On thirteen to ten, WIBA, we're gonna continue
our conversation with Tom, talk a little bit more about
his investment philosophy as well as the investment philosophy at
Wisconsin Capital Management and we'll take a look ahead as well.
We will do all of that next as ask the
Experts with Tom Plumb and Wisconsin Capital Management continues right
here on thirteen ten wiv A thirteen ten Wi b

(14:18):
A and asked the Experts with Tom Plumb of Wisconsin
Capital Management. You can learn more about Tom as well
as Wisconsin Capital Management on their website withcap dot com.
That's wiscap dot com. Tom is with Wisconsin Capital Management.
Before we talk about investment philosophy, although I'm guessing this
next question ties in with that CFA for folks that

(14:39):
don't know what is CFA, what does that stand for?
And what makes that designation unique?

Speaker 2 (14:43):
Tom Well, CFA is a chartered Financial Analyst, So that's
a designation that is pretty significant, I think for the
investment community because there are things like cfps which are
certified financial planners, but we emphasize analysis. And one of

(15:09):
the reasons I touch on that is because a lot
of times financial planners use correlations and try to diversify
things based on historical relationships, and a lot of historical
relationships that they look at from the surface basically fall

(15:31):
apart by the time they are recognized you really need
to analyze how things interact, why they interact, and come
up with a strategy about how those interactions are going
to affect portfolios going future. So we often say there's
a thin line between diversification and diversification. Spreading your assets

(15:58):
too thin doesn't really reduce your risk, not if you
don't know why assets correspond, why they don't match up,
what's moving the underlying fundamentals. So that's why we've been
very happy to be viewed as analysts and investment advisors. Certainly,

(16:22):
financial planning is an important aspect of what you do
for individuals, but we think that you need to go
much deeper if you're going to truly provide value to
your clients.

Speaker 1 (16:33):
Really creative racis I learned something new all the time
to really really interesting stuff. And I've got to guess,
as we talked then about a little bit about your
investment philosophy. Being a CFA plays into this, and we
think about, you know how how Wisconsin Capital Management, how
your firm emphasizes that balance and diversification. Let's talk a
little bit about how that philosophy, how that plays out

(16:54):
when it comes to your portfolio. Strategies.

Speaker 2 (16:56):
Tom So, what we've seen, and it's gone for years
and years and years, is that rising interest rates actually
are negative obviously for the bond market, because if I
agree to buy a bond at phase four percent and
then next month rates go up to five percent, my

(17:17):
bond is worthless in the current market, even though I
will get hopefully, if they're a good credit, you'll get
your money back at the end of this period of time.
Stocks tend to have some relationship with interest rates, but
they're also driven by underlying economics and I call microeconomics

(17:38):
as well as a macroeconomics. So our view is that
stocks over time equity investments, even if it's real estate
or if it's a stock market, that you have the
potential to provide the best long term returns. The question
and the problem is that they are volatile. As we

(18:00):
all know. You go through some periods of time when
the stocks go down. But if you look at a
company like you know, the largest two companies in the
world of Apple and oh right now it's Navidia, those
companies have many times gone down ten to twenty percent

(18:21):
in market price if you've held them for the last
twenty years, fifteen years for Apple, for example, na Vidio
wasn't even a player fifteen years ago. But those stocks
then have gone from in the case of Apple, equivalent
to six dollars in twenty eleven to two hundred dollars today.

(18:41):
You have to go through those cycles to get that return.
You don't get a double on the stock if you
sell it after ten percent or if you sell it
after it goes down ten percent. So again focusing on
the fundamentals, why do I own this company, Why do
I think they're going to be successful? Watch them very closely,
make sure that executing. So with that, then the question

(19:03):
is how do you offset that volatility so people can
be comfortable being long term investors? And with that you
have to sit and talk to your clients know what
they can tolerate, and not just asking them when everything
is going well, oh, how would you feel if the
stock market went down ten percent? They all will say, well,

(19:26):
that wouldn't be so bad. Well, the fact is, when
it goes down, you're caught in those emotions, and you
need to have a portfolio that's constructed to modify or
reduce that emotional impact when the markets go against you,
allowing you to use your head investing rather than your stomach.

Speaker 1 (19:51):
Talking this morning with Tom Plum of Wisconsin Capital Management.
Of course, Tom Plum CFA with Wisconsin Capital Management. Don't
forget if you have missed any parton day's program. We'll
have the podcast asked up for you right after the show.
You can also share it as well. You can learn
more about Tom and the team at Wisconsin Capital Management
all on their website. It's a great day to get
to know Tom and the team. All you got to
do is heading over the website whizcap dot com. That's

(20:13):
wiscap dot com. I think Wisconsin Capital Management whiz caap
dot com. Of course, this is asked the experts with
Wisconsin Capital Management and Tom before we wrap up this week.
I think we kind of touched on it a little
bit here as we talk about a little bit about
the investment philosophy. You know, you hear from folks. You
know there's some mistakes out there that folks can make.

(20:33):
And what do you see as far as those mistakes
that individual investors are making and are there ways for
them to be avoiding those mistakes?

Speaker 2 (20:42):
Well, you know the first thing is to make sure
that you have a fundamental plan. So you're going to
pay your taxes, you're going to earn your income, but
you should also think about paying yourself and time and
the mount to invest are going to be key factors
to your long train financial security. The mistake that people

(21:03):
make is that most often when the markets are down,
it's because the news is the worst, and when there's
bad news, people get emotional, and so you often see
someone sell a stock because everything's going down, not because
that company deserves to be sold, and that mistake pushes

(21:28):
a lot of people into having total returns much lower
than the markets they invest in. So from our perspective,
it's really understanding and making sure you've in advance structured
a portfolio that you feel comfortable living with. You have
enough funds to get you through the times when the

(21:49):
stock market over the bond market go against you and
you allow your investment strategy to play because time with
the compounding rate is the true builder of wealth.

Speaker 1 (22:02):
Well stated, as we talked this morning, brought a fantastic information.
Tom Plum CFA with Wisconsin Capital Management. This is asked
the experts with Wisconsin Capital Management right here on thirteen
ten WIBA. Tom will be joining us each and every
week at this time. Definitely want to make sure you
mark that down. And of course you've missed any part
of the program, you can always listen back to the podcast.

(22:22):
You can share that as well. You can learn more
about Tom and everyone at Wisconsin Capital Management on their
website wizcap dot com. That's wiscap dot com, wiscap dot
com and of course asked the experts with Wisconsin Capital
Management's right here on thirteen ten wib A. Tom, thank
you so much for taking the time this morning, and
I'll look forward to talk to you again in one week.

(22:43):
Till then you take care well.

Speaker 2 (22:45):
Thank you, Sean. It's for a pleasure chiding with you.

Speaker 1 (22:47):
This is asked the experts right here on thirteen ten
wib A