Interview with Michael Caligiuri

• I had the pleasure of interviewing Michael Caligiuri, the founder and CEO of Caligiuri Financial

• We discuss:

  • His journey with investing and how he eventually started his own wealth management practice

  • Investment strategies and philosophies

  • And advice for the next generation of investors and entrepreneurs

Link for audio file, https://drive.google.com/file/d/1Ns4pOOoti9VdSrXnfsaEwTwQa1C26F6z/view?usp=sharing

Disclosure: Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor. Stratos Wealth Partners, Ltd. and Caligiuri Financial are separate entities. The information contained in this market commentary reflects the opinions of Caligiuri Financial. These opinions do not reflect the views of others and are subject to change without notice. Content in this material is intended for general information purposes only and should not be construed as specific investment advice or recommendations for any individual. Please contact your advisor with any questions or for specific recommendations regarding your own circumstances. Investing involves risks including possible loss of principal.

Transcript:

00:00

Sure. I'm actually from Columbus, Ohio, right? So talk about the battle lines with the school up North as they call it here in Columbus. I grew up as a Buckeye fan in a suburb called up Rarlington, which is very close to university. I was gonna go to college and I wanted to go to really good undergraduate business school.

00:28

And at the time the raw school of business was ranked in the top three. So I know if you know this, but I actually went to the raw school of business as well. I'm assuming maybe that's how you found me, right? Just putting two and two together like, you know, Lloyd Christmas and Dumb and Dumber, you know, they go to the airport, you know, hopefully you get that reference. They're also very old, but yeah, with Mary Swanson, but so I went to

00:55

you know, the Ross School of Business. And actually, when I was there, I was the co-president of an investment club there called Ross Portfolio Management. And as co-presidents with a guy named Alex Lemon, he's extremely smart person, you know, probably most impressive person I've ever met. And I learned a lot from him, kind of co-managing the club with him. And I'd always been interested in investing. And so,

01:25

I think people saw that in Ross portfolio management, which is part of the reason that, you know, I became one of the co-presidents and, you know, actually while I was in college, I had a stock newsletter called stock charm. And I had a couple of guys who were kind of working for me for free and we had, you know, subscription following. I'd recommend a stock each month sort of thing. And then, you know, at the end of,

01:53

you know, business school, came time to, you know, get a job, start paying for things. So parents are basically like, you know, after you get done with college here, you got to start paying for everything. And everybody was moving to Chicago, at least most of my friends were, it either like, you know, you go to Chicago or New York, and I got a job with JP Morgan private bank. And at the time they were rated as the best private bank in the world.

02:23

And so we manage money for high net worth individuals there. And then after that, I worked for a private wealth management firm, also known as an RIA, registered investment advisor in Columbus. Again, one of the biggest in the country. Worked there for about four years. And then I left and started my own company, Calagirri Financial, a little over seven years ago.

02:51

Probably coming up on eight years here, time flies. They say the days are long, but the years are short. And talking to a freshman at Ross brings that back, realizing how old I am. I don't feel old, but I guess I'm about to be 35. So what I do is I primarily work with physicians, right? I targeted a niche. And actually that's something I learned in the Ross School of Business.

03:20

There was this class and there was this book called the big picture framework and it was all about marketing and really, um, you know, of course I'm not the marketing professor professor and I'll put in a brief synopsis, but it's kind of about looking at, okay, what do I do best? And then who are the people that I'm targeting? And you know, what, what's the business, um, or the service I'm going to provide and how am going to advertise that?

03:49

and making sure all of that's aligned. And it sounds simple, but most things sound simple and most people do those things wrong. So that was helpful for me. And so kind all the advertising I do is around targeting physicians. And so of course I invest their money and I have my own quarterly investment newsletter. I'm in charge of all the portfolio decisions.

04:19

And so I'm assuming, you know, something called the trader's Tribune that you might be interested in, you know, so, and, know, the more of the investment side of it. But my business, you know, there are two sides of it. You know, one's the investment side and the other is the, the people side. And I think, you know, what's important, you know, no matter what, you know, where you go in the industry, if you're kind of

04:46

more on the private wealth management side or if you're on the investment management side, maybe not even dealing as much as clients, you have to be really good at being able to tell a story because you're not always gonna outperform the markets and maybe that's not even what you're trying to do. You might be trying to employ an investment strategy that

05:12

you know, it's kind of an absolute return strategy, kind of, hey, this is what we're doing. And people are on board with that. And what's going to happen is what was going to happen. But if this is what we believe in, then that's what we're going to do. You know, and so I think it's really important to be able to tell a story and communicate that. So that's basically where I'm at right now. I moved back to Columbus. still live here, like I said, and I've got a wife, a daughter.

05:38

She's about two and a little over two years old. got another baby on the way. yeah, thank you. So, you know, life's Kind of taking it back, you know, a little bit, I saw on your website that you knew you wanted to do wealth management since you were 10 years old. What kind of sparked that interest in investing and then wanting to go into that industry? Yeah. So

06:05

When I was, you know, it was at least 10 years old. It could have been younger than that, honestly. You know, my dad and I were, you know, sitting in his office and he said one day, said, you know, if I would have, he was probably working late and, maybe I wanted him to do something and, you know, he still had to work. And he told me, you know, if I had not loaned your sister, or loaned his sister, so my aunt money for a car.

06:33

And he had instead invested that money in McDonald's stock that he wouldn't need to be working and he'd be retired. he could, it wasn't even that much money, but it would have grown so much that, you know, basically would, if it would have hit a home run investment, it'd be retired. And I think, and as a young kid, I'm like, the heck is he talking about? You know, I mean, McDonald's, I'm thinking of happy meals, know, hamburger with ketchup on it, milkshakes. So I didn't know, I'm like, what do you mean by

07:01

you know, investing in McDonald's. If you really think about investing, know, lot of times people jump to the more, you know, esoteric thing. So, you know, let's talk about, you know, correlation and Sharpe ratios and yada, yada, yada. A lot of it's really just about finding a company that is going to be a really good company and being able to identify one of those, maybe thinking about it more from a venture capital.

07:30

or angel investor perspective, right? And that's kind of what Warren Buffett does, right? He kind of brings that perspective of a private equity investor to the public markets. so, an investment is interesting. It's like, so you're telling me that I could be a part owner in McDonald's just by going online and clicking a button. I mean, that's interesting because you can't be a part owner in my company because my company is not publicly traded.

07:59

And it's like, so then how do I get paid? If I'm an owner, what does that mean? Okay, I get dividends. So I have to sell my shares to somebody else. How do I know somebody else is gonna be there? So that all really, the thing that interested me the most, and I'm not ashamed to say this, and this is what the late great Charlie Munger said, who I think spent some time at the University of Michigan.

08:25

of course was Warren Buffett's close business partner, big time billionaire at Berkshire Hathaway is he said, a great investments when you invest in something and you just sit on your ass for 30 years and make money and get rich. And so the idea of being able to put my money somewhere and then that just creates a bunch of wealth and I don't have to do anything. As a passive investor,

08:53

I'm not doing anything and that's what you are when you invest in public equity markets. That was alluring to me. I'm like, well, I want to be rich and I don't want to have to work hard. And if people don't want to admit that, mean, everybody feels like that, right? They're trying to work as little as possible to get as much as they can. Now, like me, I work my tail off.

09:18

Uh, unfortunately, the reality is you do have to work hard to make lot of money. You know, you do that ratio, but especially when you're young, you got a bust or you know what? Um, so that was, that was very interesting to me. And it was more about the individual companies at first that interested me in terms of what, you know, how can you identify the next McDonald's? How can you identify the next Lulu lemon, right? The next Pixar.

09:47

the next Netflix, right? Because in hindsight, everybody's like, oh yeah, that was obvious, right? But before those companies go big, there are some people who are pounding the table saying, this is a really good investment. And they're basically heretics when they do that, right? And nobody admits that in hindsight, right? All of these smart people, right? They were haters on these companies. Well, the P-E ratios are too high and there's gonna be competitors that come in here

10:16

Right? They don't think of the, they don't think about it from a venture capital perspective about maybe thinking a little bit more qualitatively about things like, you know, first mover advantage and, you know, you know, and also just, they forget that companies are just, it's just somebody who's providing a product or service. So maybe we should spend a little bit more time looking at that product or service.

10:46

instead of yada, yada, yada, yada, stuff that's going to put people to sleep. So that's very interesting to me. And yeah, I really, you know, with that stock newsletter, I began writing a book probably when I was like 10 or 12 years old, never published it. But yeah, that's what made me interested in, why don't make a lot of money? That's a great story.

11:15

So when you talk about looking at a stock, right? What do you look for specifically? How do you try to find those kind of early finds, the next Netflix, next Lululemon? How do you go about doing that? Yeah, well, and I should say that now, this is part of, there's a, Colbert gave a commencement address at, I think it was Northwestern. I think that's where he went.

11:43

He had this line in there that, you know, if we all followed our dreams and we were younger, the world would be full of, you know, cowboys and astronauts, right? But in princesses, right? But, you know, dreams can change. And he was like, you know, I'm telling the Anthony Weiner jokes on, you know, the Colbert report. You probably don't know who Anthony Weiner is. You may not even know what the Colbert report is, but it was a very good show that Stephen Colbert used to be on.

12:12

And he, you know, and so I think the point is that, my dream was always to be a stock picker and my dream changed into more of the wealth management side. And so now I use, I don't do individual stock selection. Although in a way that, does what individual stocks do does guide what I do on more of the asset allocation, more macro level.

12:41

if that makes sense. I think it's hard to say you understand US equities if you don't understand Nvidia, Apple, Tesla, you gotta look at how these indexes are weighted. You gotta understand the companies in there. So that's a whole different risk management and all that. That's where the wealth management side where you use a lot of exchange traded funds, mutual funds,

13:10

So that's a whole different, and maybe you'll ask me about that too, but kind of going back to my original passion of the individual stocks, there's actually, when I was younger, I started reading a lot of these books by a company called The Motley Fool. there, remember there was a particular book called Rulemakers and Rulebreakers.

13:38

I'm doing this all off the cuff. So I'm doing a lot of recall, but the brothers were Tom and David Gardner. And Tom was all about the rule makers was like, he would go after the more steady value oriented companies, you know, kind of hitting singles and doubles while his brother, David Gardner was the rule breaker. And he

14:00

tried to find the next Amazon, the Netflix type of companies. And he really did to his credit. He really found a lot of these companies and I was infatuated with that. And basically these companies do have a lot of common characteristics. mean, just to put it really simply and of course somebody would be like, oh, I could have thought of that, but they probably wouldn't have. before you find a company that goes up 3000%, it goes up 300%.

14:29

So it sounds simple, but look at the companies that have had the most share price appreciation over the past three years, the past five years, right? Because all of these companies like Amazon, Netflix, Nvidia, right? Those companies all were those sorts of companies. How do you literally find them? Use stock screeners, right? So stock screener, you go in there.

14:54

You go on fidelity.com, they have a stock screen or you can customize it where you enter in the criteria of, want to look for companies that have had the highest share price appreciation over the past three years. And it'll spit back those companies to you. like, you know, it'll come all of it. And you go, okay, here are these companies. Which one of these companies has a gross profit margin over 50 %? And then it narrows those down. Why is that important?

15:20

Well, if you just look at all the companies that have done really well, right. They all have common characteristics. It's kind of like, you know, backdated portfolios or data analytics. What did do in the NFL draft? Right. Wow. Let's find these guys. You know, it was 40 times this. You went to this school, you know, he's his 20 yard shuttles, you know, below 4.2 seconds and he's going to be a good defensive end.

15:43

Right. It's the same sort of thing where you enter the criteria that you're looking for. You, you try to understand the common characteristics of these companies and find them. And, a lot of these companies are first movers, right? So Netflix, they were the first ones. I still remember when Netflix first came out, it used to be that you had to go to blockbuster to rent movies. Right. And then it was like, Oh, there's this thing called Netflix where you can, they'll send you the DVD in the mail. Right. And.

16:13

you know, that they were the first ones to do that. And so the first mover advantage is basically, you know, cause somebody would have said, well, you know, Blockbuster could start sending it in the mail too. And they probably tried to do that, but they didn't end up taking away that much market share. If any, mean, obviously Blockbuster went bankrupt, but from Netflix and people kind of will always be haters and assume that anybody who comes out with something new, they're going to get all their market share taken away from

16:41

because everybody likes to be a hater. It's easier to be a hater, right? Because nobody's going to blame you for saying, well, yeah, I didn't think that they were going to take over. So, you even if you look at Tesla, right, they were the first mover kind of with these electric cars, you know, it was really the way that they do electric cars with those types of batteries, high end. What did everybody say? Oh, you know, they're, you know, GM is going to take their market share.

17:11

It sounds ridiculous to think that these companies that are perpetually going bankrupt are going to, no offense, but I you're from Detroit, are going to take over Tesla. Here comes our Chevy Volt. It's like, yeah, the people who are buying Teslas aren't going to buy Chevy Volts. Got news for you. And they end up being one of the best companies in the world. Amazon, they were the first ones to put this stuff online. So first mover advantage.

17:40

is really important, I would say. And using stock screeners, there's a whole host of different metrics you can look at, that's kind of starting there, I think is a good start. Right. So I mean, with investing, especially as of late, there's a lot of talk between technical versus fundamental investing. And it seems like you're more on the fundamental side. Would you have any...

18:09

you know, opinion on that kind of split, if any. Yeah. I mean, I, um, I am very familiar with technical analysis. I included, include technical analysis as well as fundamental analysis a lot in my quarterly reports to clients. Um, you know, one thing I did when, or we did when we were at Ross portfolio management is we had all these different teams that provided their perspective and

18:36

I, you one thing you'll find in the investment community is that, you know, there are a lot that, you know, people think they're sophisticated by poo pooing technical analysis. Oh, you know, we're not going look at those charts. And, you know, even Warren Buffett's kind of famous for saying, yeah, well, I didn't really look care about technical analysis because if I turned the chart upside down, they'd give me the same analysis, you know. But, you know, that speaks more to a, an ignorance of technical analysis itself.

19:06

Um, then, you know, him actually having done a deep dive on technical analysis and see if it works. Um, you know, I, I think that it can be helpful to what you want is you want the technicals to support your fundamental view. Um, and I think the reason that's important is because if you don't have a fundamental view, you'll lose confidence in any investment.

19:33

Right. Cause obviously technical analysis and any technician will tell you it doesn't work a hundred percent of the time. So the minute that an investment that a company, you know, per technical analysis breaks, you know, falls through a support level, right. Are you going to buy more or are you going to freak out? Right. And so if you don't have a fundamental conviction, you're probably going to freak out and not understand that it might be a good buying opportunity. Right.

20:01

Um, and I think that you, do have to be technical. You do have to be careful with technical analysis on the short side, right? Because you could stay, Oh, Hey, look, you know, there's a topping Dale, a topping tail. Um, we've got a negative divergence and, you know, this is just, this is really over by, you know, we're coming into a time count, right? All these different things that you can look at.

20:26

Oh, it's hitting this resistance line that's been in place since whatever, right? mean, it can break through those levels, right? I mean, there's an old expression that the market can stay irrational longer than you can stay solvent, right? So you do have to be careful on the short side or you just have to understand, set a limit for when you're gonna get out of a trade.

20:54

or understand sizing of how much you're gonna put in, right? Risk management is really important. You don't wanna be Albert Einstein and then get on the wrong end of a short trade and lose everything. And it's one thing to do that with your money. It's another thing to do with somebody else's money. So, I think technical analysis can be useful and it can, if you're looking at it,

21:24

You know, you could probably say, you know, I mean, like, from my opinion, tech from a technical perspective, the US markets are way overvalued right now, they're running out of steam. And, you know, so that kind of hints me to look fundamentally for things that may support that view. It's not, you know, going to totally dictate my fundamental analysis, but it'll it'll guide me.

21:53

the same reason in the NFL, if you're kind of seeing that man, all these guys that have a, you know, a really, you know, good 20 yard short shuttle drill are good defensive ends, right? Maybe your fundamental view should be that people who can move in short spaces really well, um, tend to do well, you know, Aiden Hutchinson probably had a really good 20 yard shuttle, right? So it's kind of like, you want, it's just another

22:21

piece of information that you can look at. I think it's also pretty interesting technical analysis when you look at something like Bitcoin, where I think that it, you know, I think when you have an investment like Bitcoin that you can't really have a fundamental view on it if you're being honest, because it's, you know, Bitcoin.

22:46

You can't do anything with a Bitcoin. It doesn't have any intrinsic value per se. It's not like gold. Gold could be used by itself. It was just a normal good before it became a medium of exchange or currency. Gold's used in electronics. It's a conductor of electricity. It's used for dental fillings. Obviously, it's used in jewelry.

23:14

Bitcoin doesn't have that. there's really, you know, it's like, even with gold, it's like, if it wasn't used, it's money, it's still would have value, right? Bitcoin doesn't have that. It's also not used for money. So what gives it value? I think a lot of it is technical analysis, which is interesting. You know, that maybe that's a somewhat novel perspective on it. Probably not, but it's not something I see people talk about. But

23:43

Yeah, so hopefully that helps answer your question there. Yeah, for sure. And kind of touching on more on Bitcoin and cryptocurrency as a whole, in your portfolio, especially in wealth management, do you ever utilize any cryptocurrencies at all or do you tend to stay away? I stay away from cryptocurrencies. We do use gold and silver in our portfolios.

24:11

And, you know, kind of going back to your question about technicals versus fundamentals, I think Bitcoin is a good example of that because there are lots of times where you could make the case that, hey, you should buy Bitcoin from a technical perspective. But in my view, I think that Bitcoin doesn't have any value from a fundamental perspective. Now, you know,

24:38

Obviously, I wish I would have invested a bunch of money in Bitcoin a long time ago for myself and all my clients, right? Because if you make money, you make money. And you can talk about fundamentals and gold all you want, but if somebody's laughing the way to the bank, they're going to be happy that they invested in Bitcoin. from a fundamental standpoint, the fundamentals are more important to me than technicals at the end of the day. And I think that

25:06

probably what will happen with Bitcoin at some point. And this will probably coincide with the next major stock market crash is that Bitcoin will crash, you know, probably 80 or 90 % blow through any technical resistance level known to error support level known to man. And a lot of people are going to get sued. And the reason they're going to get sued is because nobody gives a hoot about the technicals from a legal perspective, really.

25:34

They're going to say, so tell me why you invested in this Bitcoin. Now it's down 90%. You know, what is Bitcoin? And you're sitting up there, you know, kind of like in one of these Senate hearings, you know, and everybody's asking what is Bitcoin? Well, it's something that somebody, right. It's nothing. I mean, ultimately, and there's going be a lot of lawsuits, in my opinion. And the reason is because there's really no fundamental basis for Bitcoin. A lot of the basis for Bitcoin that people purport is

26:04

more just a relatively accurate view of the downfalls of a fiat monetary system, but it's not really in support of Bitcoin. There's this big assumption that, oh, well, if the US dollar loses value and the Federal Reserve keeps printing money, then we got to go to Bitcoin. But that's not necessarily true. And Bitcoin is extremely correlated with the NASDAQ.

26:33

And that's probably because it's a risk asset. It's not correlated with gold. It, you know, for what people kind of qualitatively describe it as, um, that's not how it trades, right? Traders' Tribune, right? It's kind like when you watch a movie, Freaky Friday, like, Oh, Freaky Friday. I just saw that last night, but you know, it's, that's one thing you'll find with these Bitcoin people is, you know, they claim to be big traders and all this stuff. And they claim to

27:01

you know, think that there's this great fundamental view, but if you actually watch how it trades, it's just a risk asset that people buy when they're feeling good. And when things are not doing well, they generally, sell it. Right. And this is, you know, this kind of thought of, you know, of Bitcoin. This also include Bitcoin ETFs and currency ETFs. mean, the theory of ETF was just approved to be traded last, last summer. So does that sentiment?

27:29

include that too or no? Yeah. mean, ultimately it's, you know, if, if, you know, if you go back to Tulip mania and, you know, and then, you know, the dove, the wherever that was in the world, I forget maybe Denmark or something, but I don't know if, know, Tulip mania is, but it's when Tulips, like the flowers had huge amounts of value. You know, they they were way overpriced and of course, it was a lot like Bitcoin.

27:56

Even if you look at it from a charting perspective, the price movement is similar because the charts, as you know, kind of reflect human emotions. And so when you look at things like Tulip Mania or .com crashes, rises and crashes in Bitcoin, they can kind of look similar. History tends to repeat itself, which is kind of an assumption of technical analysis or at least it rhymes. So if I don't like Tulips,

28:22

Let's say I was negative on tulips back in the day and somebody said, well, are you negative on a bag of tulips? I'd say yes. So, you know, an ETF, you know, my negative on a Bitcoin ETF, worse, full of Bitcoin. I mean, it's, you know, I think that there will probably be a lot of problems with Bitcoin ETFs. think if you're going to own Bitcoin, you know, this is not an investment recommendation or anything, but

28:50

It probably makes more sense just to own it in a wallet. I think that there's probably going to be a lot of liquidity issues with those ETFs when a bunch of retail investors who don't know what liquidity means just click the sell button and the ETFs try to unload a bunch of Bitcoin and there are no buyers on the other end because it's a very thinly traded market. So I think it's kind of giving the illusion that, this is legit. There's a lot of volume and

29:19

But at end of the day, these are the same companies that these ETF people are the same companies who stuff people in mortgage backed securities. Whether they'll tell you that it or not, they're there to serve their shareholders. That's also their fiduciary responsibility. And so if making a Bitcoin ETF, charging fees for it serves their own shareholders,

29:45

Not necessarily investors in the ETFs, but the shareholders of the companies make these ETFs, they'll do it. So I think what the Bitcoin community tries to say is, oh, well, look, there's a Bitcoin ETF. mean, know, BlackRock, they're bullish on Bitcoin. That's not necessarily true. But right. And so we've talked about stocks, little bit of crypto. Are there any other alternative asset classes that you include in your portfolios or?

30:13

Yeah. So we invest in gold and silver. physical gold bullion through like GLD, know, SLV for the silver ETFs. know, we use GLDM, SIVR, which are just also, you know, bullion ETFs that have lower

30:36

expense ratios. that's, you that should be more of an emerging asset class, in my opinion. You know, you talk to a lot of people and they'll never talk about gold. You know, it's funny, because if you look at, you know, the price performance of, if you go on Morningstar and you type in GLD and then you type in SPY and you just go back all the way, know, gold's outperformed the S &P 500 for a really long time. You might not even know it's up another 30 % this year.

31:02

So you don't hear people talking about it. Exactly. Right. You're the you're Mr. Traders Tribune. Right. So, you know, gold, you know, they it doesn't get talked about as much. And a lot of people don't know that our country actually used to be on a gold standard up until about 1970. And, you know, maybe not coincidentally, this year has been the worst start of the year for the U.S. dollar since 1973. So maybe making a

31:30

corollary to that of kind of what we're going into right now, maybe a big stagflationary period. But, you know, I've back in August of 2019, I transitioned my clients, I transitioned part of their portfolios away from fixed income into precious metals, so a mix of gold and silver. And the reason for that's basically, you know, I remember when I was

31:57

at the BBA program and, you know, it's running this club with Alex. We brought in this other guy. His name is Matt Cantor, man. Really, really smart guy. Now, probably the smartest person I've ever met in regards to, at least in regards to investing. If you could get him on here, you know, he'll blow your socks off. He's a Ross BBA. He's got.

32:26

I don't know who he's working for now, but he was at Bloomberg for a while. He's somewhere else. Guy's really, really smart. And I knew this, you know, and I think Alex knew it too. And he actually had, you you've probably heard of Zero Hedge. You ever been on Zero Hedge? Yeah. I've heard of that. I don't think been on it though. Oh, you gotta go there, man. That's the best place to get.

32:54

non mainstream articles about finance. You know, they also republish a lot of stuff from like Goldman and, you know, and, and, you know, some of the big bulge bracket banks, but they've got really good insights on there. So if you can read there and understand what they're talking about, you know, that is going to make you seem really impressive if you go into job interviews, right? Cause you're going to be learning about, you know, Jack and Jill stuff in school, right? Kind of.

33:21

okay, hey, here's a P ratio and whatever. But when you go into these interviews, a lot of them are gonna wanna know if you've got a feel for what's actually going on, kind of current events and the specifics of things that maybe some of your professors wouldn't even understand, because they're not necessarily inclined to look into it, right? But anyway, it's this really popular website and Matt Kantriman

33:51

uh, had his own website and it was like a blog, you know, but it was, was very much like zero hedge. It was kind of a playoff of it. And it was called QE infinity. And I'm like, the hell is he talking about QE infinity? Like, I didn't even know what the federal reserve was. You know, I mean, I, I, it's got a printing press there or something. And basically, and at that time, I mean, that was like, I mean, he, probably started this thing and like,

34:20

2010, if not before. so, and he's, the same year. And so at that time, you know, he knew about the federal reserves is going to keep credit money, right? Like basically like we're, we're so far off the reservation. We're never going to stop QE. And he was very, I think the right word is prescient, prescient of, he could, he saw that coming, right? He knew that we're just, you know,

34:49

This is gonna be, we're just gonna keep printing money, just like we did after 2008. And they're saying, oh, we're gonna reduce the size of the balance sheet, but then they're print money again. So we're kind of turning into this banana republic where we just keep printing more money. You see it even right now with the current administration saying, oh, Powell's not raising interest rates enough. So they're explicitly saying we want lower rates, which is basically saying we want you to print more money. That's basically what that means.

35:19

the deficits continue to grow under whatever administration's in there. It's very bipartisan. Your average American who's reading mainstream TV ads thinks that there's a big difference between these two parties in a lot of ways, but there's not. They're massive deficits. From a fiscal perspective, there's really not much of a difference, if any, in terms of they're both just spending money into oblivion.

35:49

and they're depreciating the value of the dollar. So in August of 2019, or right before then, this is right before COVID. If you look at a chart of the Federal Reserve's liabilities, which is the money they've printed, this is what they do. They print money and they go, oh, here's a liability. And then they buy bonds with them. go, here's an asset. It's just a bunch of fake accounting, but that's what they do.

36:19

they started printing money again right before COVID, a little bit, a little bit. And I'm like, so they had, and before then they had been reducing the size of the balance sheet. I told all my clients, go, this is, they're going to start printing money like crazy. mean, I didn't know COVID was going to happen, but we, and I go, we got to get into gold and silver because that's how you protect yourself against inflation, right? You've got hundreds, if not thousands of years of history showing that gold and silver are the ultimate hedges against

36:51

massive price inflation. so, you know, I mean, the, the, the price of gold for an ounce of gold in 1970 was $35. Right around that time was before they got off the gold standard was $35 an ounce. Right now it's like, you know, 24, 2500, 2500 an ounce, right before breakfast. So if you think about, I'm sorry, it's 3300.

37:18

3,300. So we've gone from $35 an ounce to 3,300 an ounce. So it lets you know how much value the dollar has lost relative to gold. so that talk about alternative investments, that's something that not a lot of people are thinking of because the traditional is, you just have stocks or bonds and they act like private equity is an alternative investment. And private equity really isn't an alternative in the sense that, yeah, it's not marked to market.

37:48

like a publicly traded stock, but I mean, it's obviously highly correlated. mean, you're investing in a company, right? If it's private or public, mean, it's not really that much of an inherently different investment. So there's always this argument that, well, we're going to diversify you by putting you in private equity.

38:11

And really it just feels diversified because you don't see the price moving up and down every day. Cause it's not market to market. It's not tradable. Right. So what actually is an alternative, right? It's not private equity. It's precious metals or it's shorting the market, right? Or it's investing in certain more heavily in certain sectors, whether it be energy or basic materials, whatever that, you know, give you more exposure. And I think that, you know, bonds,

38:41

is are just future payments of dollars, least US bonds. So, you know, a lot of people forget that, right? They think very exotically and esoterically about bonds. It's just dollars. So if you're negative against the US dollar, and you think that you need to protect people from inflation, you shouldn't be investing in bonds, need to find something else. But the investment industry at large has kind of yet to, you know, make the go ahead to fully, you know, get into gold.

39:11

You know, again, kind of that first mover thing, you know, back to that people are always afraid to be the first ones to do that. So I think that, you know, for my clients, we've been in this trade since August, 2019, at least all the clients who've been with me since then, and we've made a lot of money. And I think it's still an extremely under-owned asset class, gold, silver, gold mining stocks, precious metals in general. Again, not investment recommendation here. I know it's for my compliance people.

39:40

I never thought of it that way. That's really interesting. So kind of going back to you and your story, how did you transition from working at a wealth management firm to starting your own? And was that something you always wanted to do? Was something that came up in the moment? What was that kind of transition like? Yeah, you know, I did always want to be a financial advisor and I did always want to have my own company.

40:08

As a little kid, that was always my dream. And I thought I'd be picking stocks doing that. But I think after I, you know, I worked for JP Morgan, you know, with all due respect, I understood that that was not a place I wanted to be working at. So, and I won't get too far into that because this is a recorded interview, but it just wasn't the place for me. And, you know, I think when I worked for the

40:37

private wealth management firm, the registered investment advisor. I do think something could have been worked out there potentially where I didn't have to go and start my own business. But I think it just became apparent that what I...

41:02

that basically it made more sense for me to leave and start my own business and stay there, right? I I basically wanted autonomy and I wanted to be able to say, look, if I bring in clients, I wanna have ownership of those clients, like legally, and I wanna be paid a certain percentage of the money that those clients pay, right? And I think that basically,

41:31

the company that I wanna do that, my opinion of their response is they didn't wanna do that, right? They wanted to probably pay me a salary. They wanted me to not have ownership of those clients and not as much autonomy, at least relative to what I wanted to do. Now, when I was in college, actually, I did have an inkling that I wanted to start my own.

41:59

company and I studied and passed the series 65 exam, which is basically the only license that you need to start your own wealth management firm. And I knew that from doing research. Um, and so I passed that just while I was in college. And, uh, part of the reason I left JP Morgan actually was that they were not going to let me hold onto that license at JP Morgan.

42:26

Um, and so basically right before that license was about to expire, I left JP Morgan and started working for that RIA in Columbus because they would allow me to have that license. Um, so, you know, and I think, you know, in, in, the wealth management industry in general, if you want to make a lot of money, um,

42:52

you kind of have to start your own business and have ownership of the clients. You know, that's how it works in general. And so, and to have kind of the lifestyle that I wanted to have, that was the route. So, you know, that's what I did. And I started from scratch, didn't have a single client, but you know, I was single myself. I think I was like 27 or 28 years old. And I lived in a one bedroom apartment in Grandview, Ohio, paying 600 bucks a month for rent.

43:21

Uh, nothing. And I was, it was a nice place to good location. I ate Campbell's soup every night and I loved it. Right. I had one fork, one spoon, one bowl, one plate, one cup. And I kept it real simple. And it's like my girlfriend met me. She probably thought I was a serial killer or something. Now I've got more silverware, you know, for, you know, a family of 15. Um, but if you can keep your costs low.

43:52

you can have a long runway before you actually need to be making a lot of money. And, you know, one thing, you, take some entrepreneurship classes or something at Ross, one thing that you'll learn is that, you know, lot of these companies, they, they don't go, they don't fail because it wasn't a good idea or because, you know, they, they weren't good at what they did. They failed because they ran out of money.

44:21

Again, sounds simple, but a lot of times what you do with the company is you basically say, well, I still need to spend money for my personal life and my business. So I need to have a certain amount of cash set aside to do that. And then I better become profitable before I run out of cash, right? It's called your burn rate, right? And so a lot of people, don't put together a business plan and they don't think about that. They kind of think, oh, I'm just going to do something and see if it works.

44:50

that's not really how it works. That's not how serious people approach businesses. So I had a good idea that, look, I had saved up a bunch of cash. My expenses are really low. I can make this work. And wealth management firms can be a very low cost business with huge upside, which is a good kind of asymmetric bet to make. Right. And I know earlier you talked about finding a niche. How did you choose that niche of

45:20

physicians specifically for your business? Yeah. So, uh, when I was at that private registered investment advisory firm in Columbus, um, there were clients there who were physicians at Ohio state. And, um, one of the things I did is I helped those physicians, you know, as a financial advisor and I gained it extremely deep understanding of how their retirement plan system works. Right. And so.

45:48

you might think of, most people just have like a 401k or something, right? Which is what I even thought as an advisor. But if you're a physician and a huge portion of physicians work for either government hospitals like Ohio State University, which is where a lot of these clients are worked at, or they work for nonprofit hospitals, which are a ton of these hospitals that are nonprofit. And they actually have different retirement plan structures.

46:17

They have like 401A plans, 457B, 403B, 415M, They're all the, know, pensions, they're all these different sorts of plans. And one of the unique things about those plans is that the employers are able to contribute as an employer a lot more to those physicians retirement plans than a private employer would be able to do.

46:45

So what happened is that all these physicians were getting really wealthy. I'm like, what the heck's going on? Like, look at their account values. And I'm like, what's going on here? And it's like, you know, their employers are putting in like a hundred thousand a year into their accounts, you know, and, the physicians themselves could save like a hundred thousand dollars a year. It's all pre-tax, right? So, you know, basically there are the government and nonprofit hospitals are given major tax benefits that are passed onto these physicians.

47:14

which helps them become wealthier. And as you'll see, when you graduate from Ross and start to get into work, and a lot of businesses are kind of centered around taking advantage of the tax code, right? There's some tax loophole that they're exploiting. It may not seem obvious at first, but there's some weird tax loophole that people are exploiting, right? And so that's kind of what I'm doing, right?

47:43

But the other thing was, I remember in 2008, there was a big recession. This was the year before I graduated high school and I graduated in 2009. But even during that time, big recession, a lot of people lost their jobs. It's like, who didn't lose their jobs? Physicians. So I wanted to work with people who had kind of recession-proof jobs.

48:10

And, you know, doctors, they all talk to one another. There are lots of doctors. Doctors get hired every year. They go into residency programs. They get hired at the hospital. There's this whole culture around it. So it made a lot of sense from a business perspective. You know, they make a lot of money. I think a lot of them want to build wealth, right? These are people who care a lot about education.

48:36

and maybe they haven't been as educated as much on finances because it's not part of their medical school curriculum really. So they're people who really want to build wealth. They're people who have a high enough income to build wealth. And I think they're great referral sources because they generally have a lot of good friends and colleagues who are also physicians. Right. And I also saw that you had an insurance kind of branch to your business as well. How did that come about? Man, look at you snooping around.

49:05

No, I'm kidding. I did my due diligence. Yeah, I like it. Yeah, yeah. you know, these, so I started CalJury Financial first, which is the wealth management business. And then what I noticed that I didn't really know when I started my business is that all of these physicians, virtually all of them really want to get what's called own occupation disability insurance. As if you think about it, if somebody's a brain surgeon and then, you know, they burn their hand on the stove,

49:34

Right. For, me, not a big deal. I can still do my job. They can't do their job. Right. Even if they have a really minor injury, they may not be able to work for the rest of their career. Right. And so that is a very acute problem with especially, you know, procedural list resurgence or our physicians. Um, but, know, basically, you know, you, and this is part of, you know, starting a business too, as you see where the demand is.

50:03

And then you make a business for that, know, kind of looking at, you know, the big picture of frameworks. So yeah, that's really kind of an ancillary, but also complimentary business to Caledro Financial where I help those clients get individual disability insurance. also help them get term life insurance, right? A lot of these people are, you know, starting families, having kids, so they want to...

50:30

protect their families with life insurance. And I can also help them with liability insurance with just kind of simple insurance like auto, homeowners and umbrella insurance. These physicians are oftentimes targets of lawsuits because they tend to be rich and you can Google them and people know MDs make a lot of money. And so part of the Wealth Management Service is to make sure you have this risk protection.

51:00

you know, and part of that comes through insurance. So we're able to protect their risks through life, disability, and on the liability side with property and casualty insurance. And I mean, earlier you said that with the wealth management business, there's two sides. There's the technical investment side, and then there's the people side. We talked a lot about the investment side. Could you touch up a little bit on the people side and how that works with you? Yeah, well, that's what it's all about. You know, my, uh,

51:30

one of my best friends, dad's, I really successful sales guy. And he used to say, uh, you know, nothing happens until somebody sells something. And it's kind of a cocky, but true thing that, know, you might have, you know, 200 people working at a company having all these specialized roles, but nobody's got a job unless a salesman, you know, that's what makes it tick. So you might be Warren Buffett, but

51:57

If you can't convince anybody to give you their money, you're not gonna have a business. You're not gonna be Warren Buffett. And so that's a very important part of it because I think a lot of people just assume if you build it, they'll come. That's not true. You need to understand the sales side of the business, the relationship management side. There's a really, really good professor at Ross. Hopefully he hasn't retired for your sake, but his name is Follett Carter.

52:24

and he was a really successful sales guy at, can't remember the name of the company right now, but in his career, he was a very successful sales person. He taught a sales class at Ross. And so I learned a lot from that class. I still remember everybody was interviewing, trying to get their jobs. We were all senior, everybody's obsessed with getting a job.

52:53

And everybody's, yeah, I still haven't heard back from them. And, know, this guy, you know, fall a card. It goes, yeah, don't know. You guys are doing it. Cause if I were you, I'd walk in there and I would ask them, uh, you know, let's say you're applying to be an investment analyst at, you know, black rock or something. Yeah. And he goes, I'd walk in there and I'd say, look, um, you guys have hired a lot of people for this job to be investment analyst of black rock. You've seen a lot of people go through your program.

53:19

And some of those people have probably been successful and some of them probably can't. And immediately you're going to have captivated their attention. Cause every Jack and Jill who goes in there is not being proactive. They're being reactive to the questions that are being asked. So you're immediately going to catch their attention and they're probably going to say, yeah, you know what? And they're going to be relieved. They're going to like, finally, we actually have an interview with a real person rather than some, you know, robot that's been put through. Uh, this is how you do an interview.

53:49

through Ross, right? And they're going to say, yeah, I mean, you know, a lot of people are successfully come through here, you know, the three things are that, you know, they come in here, you know, they're able to get their CFA. And, you know, and, you know, that they, you know, participate in company events, and, you know, that they communicate well with everybody at the company, right? So they'll give you these three things, you're say, okay, so I'm hearing from you is that

54:18

Yeah, and you don't need to make it all fake and stuff. like, all right, just have a normal conversation. It's like, all right, so you tell me you need somebody to come in here to get their CFA, to go to all their company events and communicate well. Let me tell you how I can do that for you. And you're gonna say, okay, get my CFA. You're gonna say, look, I can't prove to you that I can get my CFA, but I'm a sophomore at the Ross School of Business and I've already on my own passed my series 65 exam. Which at that time, I'm just coming off the of my head.

54:47

I've already passed this exam. And if you want, I'd be happy to sit for level one CFA before I even graduate to prove to you that I can do that. I'm a very good test taker. My SAT score was this. And just give it to them. Because what's interesting is that they may want to know you. That is a very important piece of information to them, but they'll never bring it up in that interview. They're never going to bring up what they actually want to know.

55:16

That's the head fake with interviews. You think that, well, as long as they answer all these questions, well, I'm in. They're just like you. They've got this robot set of questions and you've got a robot set of answers. And the irony is that nobody's getting any of the information they need and you both did a perfect job, right? So it's like, they maybe do want to ask everybody what their SAT score was, but, cause they need people to be a CFA, but you might be the only person who told them, you know?

55:46

And it's the same thing with the other two things. Okay, how are you gonna, you go to company events and be like, well, you know, actually I'm the social chair of my business fraternity. I organize all these damn events and I get everybody, not only do I go, I organize them and get everybody to go. They're gonna be like, oh, geez, Christ, look at this guy, he's perfect. You know, and they're not gonna believe it. And it's such a simple strategy, right? But that's basically what I do with clients is really try to understand what is it that,

56:15

they want, right? What is it that you're looking for from me? And, you know, after I hear that from them, then I can explain how what I do does or does not fit with what they want. And that's an important element too, because if they're looking for something that I don't provide, I want to know that upfront. So I don't waste my time with them. That's another key sales thing to learn is that maybe the best sale is just getting somebody out of the way.

56:46

that doesn't make sense for your business. And it's like, you go to my website and it says, Hey, get a financial plan for physicians. Well, anybody who's not a physician, they're going to be like, I guess this guy works with physicians. That's what I want them to think because I only want to work with physicians. Um, so you could go in there and you could say, Hey, look, I'm really looking for a starting salary of, know, at least 120,000. And I want to work in either New York or Chicago. And if they're like, well, you know, we can get you up to one 10, but you know, we're only in Kansas city.

57:14

you're going to be like, all right, well, thanks for your time. It's like, that's what should happen, that's not always what does happen. So I think that's how do you do the people side. It's about asking people for their feedback, asking them what they're looking for. And the most important thing you can do, I, because I talk with a handful of people.

57:41

And a lot of people over the years who are kind of new to this industry of the wealth management, asked me how to be successful. And I tell them, answer your email, do it quickly. Okay. Because, and you know, like I had another kid reach out to me from Ross, actually, I don't know. I can't even remember what he reached out to me about, but he didn't follow up quickly. That kid's not going anywhere. And it sounds simple. You're like, yeah, doesn't everybody...

58:09

99 % of people don't answer the emails quickly. They don't follow up quickly. Right. And they're not clear about what it is that you're looking for. It's like you contacted me. I said, yes, I sent you the link. You scheduled it. Like you're one out of a hundred. Yeah. It sounds crazy, but you are. So I would keep that. And I will say, even when I got my job at JP Morgan private bank, one of the first things they said to me is I've never seen anybody communicate as quickly as you have.

58:38

Really? So there you go. Just with the emails, just with that, just with the MD, I was emailing. That's what he said. Wow. That's, that's good advice. And thanks. Thanks for that. My next question actually was going to be, you know, um, if you can go back, what would, you know, one piece of advice to give you younger self and you kind of answered that already, but if you had anything else, I'd love to hear it. Well, what was it? What did I say? can't even remember now. So your emails,

59:08

Oh, answer emails fast. Yeah, that's true. I already did that well though. Little did I know how important that was going to be. Little did I know how few people answer their emails quickly. That's actually one of my biggest sales points. People say, why should I work with you? And I go, I answer my email quickly. And I've worked for firms with lots of people and they get in at nine and they leave at 4.30 and they're not busting their hump because they don't own the company. Like they're lazy. So if you want to work with somebody who's going to answer your email.

59:37

work with me and that's what people really want. At the end of the day, in my business, what people want is when they call you or they email you, you pick up the phone, you answer their email, you answer their questions quickly and you do well. That's all they're looking for. Yeah, one piece of advice, what with like career stuff? Just in general, personal career. Yeah. I would say that

01:00:08

I think that, and this is no offense to the people at Ross, obviously they do a great job and maybe they do a better job than anybody else in the country. Maybe they do the best job of helping undergrads, but there's a lot of pressure when you're in the business school to work for like one of 10 companies. It's like, they're gonna try to push you to work for

01:00:37

Goldman Sachs, JP Morgan, McKinsey, Boston Consulting Group, Deloitte, Price Waterhouse Coopers, right? There's a handful of companies that I don't wanna push you to. And I don't know why that is. Maybe it's because it makes them look good. I mean, maybe it's not. Maybe coincidentally, it makes raw school business look good if they could say, hey, here's where all our undergraduates work. And that is impressive and good for them.

01:01:08

Um, and for a lot of people, you know, Blackstone, BlackRock, all these companies for a lot of people, that makes a lot of sense. Um, but you know, there, there are a lot of other ways to make money. Right. And at the end of the day, that's really all you're trying to do, right. Is live a good life and make money. Um, and if you think about where you're from, you know, I don't know if you're from like,

01:01:33

Bloomfield Hills or whatever one of the. Yeah, Lucky guess, right? Yeah. I remember my four years and somebody says they're from Detroit. They're from Bloomfield Hills. But. But, you know, if you think about where you grew up and you think about, know, which one of my friends parents are rich and what did they do? Yeah, maybe a lot of these people kind of do random things. You know, maybe some of them have parking garages.

01:02:02

you maybe some of them as a car dealership, maybe somebody, you know, installs floors, you know, epoxy floors for companies. And so, you know, there are a lot of different ways to make money. And I think it's all about finding what makes sense for you. And I'm not somebody who would have done well in a big corporate environment like JP Morgan private bank.

01:02:31

I don't think if I stayed there, I would have done very well. And that's, you know, taking a humility pill too. And I got the job, but you know, I wasn't for me. So, um, and I think, you know, you might feel like, you know, sometimes when you go to a really good school, like Ross, you're kind of embarrassed to take that step back, to take that step forward. But you know, that's what I did in my career, right? I, I left a really good job. I started my own company where I wasn't making any money.

01:03:01

And yeah, for a certain period of time, there are all the people in the peanut gallery saying you shouldn't have done that. But then when you end up being successful, you know, none of those people say anything and you know, they all say, Oh yeah, I knew he was going to be successful. So, you know, don't be afraid to take a non-traditional route and, know, don't be afraid to take risk because, know, and, and especially if you like, let's say that you, do get, you know, you're a smart kid. Let's say you get a job at, you know,

01:03:32

Deloitte or something. know, let's say you get your CPA or something, right? It's like work there for a couple of years. Like, why not just try to do something big? mean, that you not, not randomly, it's well planned out. And it's like, if it doesn't work, then you'll just go get another job at Deloitte, you know? And if you never take that risk, you're never going to get that payoff. Right. Or if you never get off that fast track corporate route that they're going to try to put you on,

01:04:01

maybe you'll wonder, know, there's no shame in, you know, being the company with all the vans driving around for, you know, HVACs, right? And owning that company or something like that. So I would consider some of those, I would consider that and not feel like you're, getting forced into something, you know, like, um, and, Alex lemon, that kid, I ran the guy, I, uh, the man I ran the club with, um,

01:04:28

You know, he did work from Boston Consulting Group for a while. And now he's the CEO of this company called Tommy's Express Car Wash. Right. And, know, you may have never heard of it. I think it might be based out of Holland, Michigan. I think that's where he's from. But, you know, they're a nationwide company. They're like one of the 50 fastest growing companies. And it's like, how cool is it that? And it's like, you know, you'd be surprised. There's a lot of money in those car washes. A lot of money, big margins. And, you know,

01:04:58

I've got to, you know, maybe you can make a lot of money doing something like that, you know, make your own car washes. So I'd keep your eyes open because a lot of times it's those weird markets that are not oversaturated with talent, right? There's not going to be a dearth of talent at Blackstone. You know, so maybe you pop out and do something a little bit unheard of and you could really make a, you know, be a big, bigger fish in a smaller pond. But again, for, you know, I think

01:05:27

It is helpful to get experience at those big places, but always look for those opportunities at least. Right. think that's great. Thank you so much.