One HUGE Key to Building an Anti-Fragile Portfolio

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Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski Up down.

Speaker 2 (00:18):
I'm trying to think of various other things. Mister Miyagi
said in Karate Kid. Remember it was like paint defence
op down again. He could listen to the chattering classes
on the business networks want I'll say the market's going up,
but the other one will say it's going down.

Speaker 3 (00:34):
Yeah, that's again.

Speaker 2 (00:36):
They're having a grand old time doing that. And who
what where? Where's the stock market gonna go? Where's the
where are the bears hide? And hope the bull market's
gonna keep running? Yeah, I'm not a big fan of
the whole animal breakdown when it comes to markets. None
of it matters, No, no, no, I say that all
the time. It doesn't matter to us here at Markowski Investments.

(01:00):
The one of the biggest mistakes that investors make, and
this is this is not just ordinary folk out there.
These are the same fools the money managers that you'll
see on TV is trying to predict the market rather
rather than trying to guess. Rather than trying to guess

(01:22):
what the next major move the market's going to be up, down, sideways, backwards, forwards.
You want to have a portfolio that can handle extreme situations.
You want a resilient I said, I don't even like
there's no word resilient, anti fragile, and I'm stealing that

(01:42):
from Nicholas Talent. The average, the average investor in stock
mutual funds it's down here, made three point eight percent
a year over the past thirty years. That's less than
a third of the S and p's average gain over
that period of time.

Speaker 3 (02:02):
It's horrible. Why well, people buy high and they sell low.

Speaker 2 (02:07):
There's a professor that I've cited going back to the
nineteen nineties. This guy, he's at.

Speaker 3 (02:15):
Berkeley right now.

Speaker 2 (02:16):
His narration is Terrence Odine, and he studies investor behavior
and he has demonstrated.

Speaker 3 (02:23):
Demonstrated during the nineteen nineties during the dot com run up.
He's been doing over the years.

Speaker 2 (02:28):
Investors continually buy and sell stocks at the wrong times.
Investors sell stocks that are undervalued, that are poised to rise,
and they purchase stocks that do worse than the ones
that they sold, they did worse.

Speaker 3 (02:43):
This is his quote.

Speaker 2 (02:44):
They did worse than if they had been throwing darts. Okay,
how does one determine a top? I've mentioned this and
it's in our Financial Independence top twenty. Actually, but when
markets are going up like gang busters, believe it or not,

(03:04):
that that's when your portfolio needs the greatest amount of
attention and maintenance. Say that again, when markets are running
through the roof, that is when your portfolio needs the
greatest amount of attention and maintenance.

Speaker 3 (03:22):
Why is this?

Speaker 2 (03:23):
Okay, back to mister Miyagi, Mister Miyagi, Yes, nineteen eighties
film Karate Kid, mister Miyagi explaining to his karate student
Daniel Daniels. Impressed, Remember Daniels impressed with the bonzai trees

(03:43):
there and how you know the form, how beautiful they are,
and he asks, you know, ask him how he does it?
And mister Miyagi tells Daniels, sonia cut yeah, snip that.
You know at first it was a picturew tree, picture three,
picture tree and your head and you take care of
the tree.

Speaker 3 (04:02):
You cut here and you snip here.

Speaker 2 (04:06):
Proper portfolio management entails in essence that the same delicate,
continued touch and maintenance, where you are trimming positions that
get oversized, reallocating assets elsewhere. This is how you may

(04:30):
you get a company that's a great company. And this
might be a company your portfolio that you think is
going to go much much higher, much much higher over
the next five, ten, twenty years. But guess what, that
thing has gone up like gangbusters. And then you've got
other companies in your portfolio that have lagged. They've lagged
for whatever reason at that point in time, markets are

(04:52):
not favoring whatever it may be. You take some profits
off the table, you cut here, snip there, and you
re allocate those assets. Yes, again, I know what we
teach here on the program. Not not popular, not popular
on the business programs out there. Nobody really talking about

(05:13):
this at all because again it's it's not exciting by
any stretch of the imagination. A lot of bad teachers
in the financial world. And what did mister what did
mister Bagi say?

Speaker 3 (05:24):
He said, no, no such thing.

Speaker 2 (05:26):
Bad student only, bad teacher. Stop listening to bad teachers.
Watch Dog on Wall Street dot Com