The Dividend Cafe - If You Could Ask Just One Question

Episode Date: April 17, 2026

Today's Post - https://bahnsen.co/4mUGiFb Trevor Cummings hosts the Thoughts on Money podcast with Brett Bonecutter to discuss his post “If you could ask just one question” and reframes due diligence around a single, telling question: “How do you invest your money?” Cummings cites Nassim Taleb’s “skin in the game” idea and argues that what advisors or managers actually own reveals more than their sales pitch. He shares an experience with a Twitter-famous fund manager whose personal investments didn’t match his promoted strategy, plus parallels from advisor training, restaurant “eat your own cooking,” Buffett’s 2008 Goldman deal requiring executives to keep shares, a New Guinea “peace child” story illustrating aligned incentives, and post-1929 insider-trading disclosures. He contrasts skin in the game with the fiduciary standard and closes with a client example of risky concentration in two stocks, urging slow, thorough due diligence starting with this question. 00:00 One Question Diligence 01:40 Skin In Game Rule 02:48 Quitting Social Media 05:31 Twitter Fund Manager Story 09:22 Eat Own Cooking 11:11 Red Flags And Nuance 14:34 Buffett Jockey Clause 18:35 Limits Of Skin Game 19:56 Peace Child Setup 20:26 Judas vs Jesus Story 21:24 Peace Child Incentives 22:21 Advisor Skin in Game 23:42 Fiduciary vs Incentives 25:09 Taleb Fund Cycle 29:54 Do You Follow Advice 31:41 1929 Insider Trading Rules 35:06 Eating Your Own Cooking 35:39 Diversification Wake Up Call 38:04 Due Diligence Closing Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

I'm Trevor Cummings, and these are my thoughts on money. Hello and welcome to the Thoughts on Money podcast, what we like to call Tom. I'm Trevor Cummings, the host of the podcast, and at least for this week, the author of the Thoughts on Money blog. I titled it, if you could ask just one question, and I'm here with my friend Brett Bonecutter to discuss this topic. Great to be here, sir.

Usually, if you could ask just one question, is related to asking God, just one question. But today we're taking a different spin a less interesting spin, and that is that in our industry, a common buzzword is due diligence. What type of due diligence did you do on that investment strategy? Did you pull on every thread? Did you turn over every stone? And can you walk away confident about putting dollars in that investment strategy? But the unfair hypothetical that I created today was, what if you could ask just one question? So I had a question about just the context for the article and what prompted it for you.

Was this something just about strategy in a generic sense, or did you have alternatives and private markets more in mind? Because I feel like I hear the words due diligence associate a lot more with private market kinds of investment. So I didn't know if that tension was there, if there was something that prompted this for you. Yeah, I was thinking more broad. any investment strategy. But I do think you're right because alternatives can be a little bit more esoteric or they can be a little bit more murky. There probably is a higher need for due diligence and a different type of due diligence, a different set of questions and approach. But I was just saying in general, one thing that should be pretty common knowledge is that you're hoping the person

on the other end that's recommending or giving advice would follow that advice themselves. but I actually don't think it is as common as one would maybe assume. Yeah, and I loved your Nassim Taleb quote, so I wonder if you could get into that and unpack that for us. Yeah, Nassim Taleb wrote a book called Skin in the Game, and I love the candor that he placed on it, and I pose this as this is the one question I would ask if I was limited to one question. I will conclude the article and say,

you should never do due diligence with just one question, but on thoughts of money, we can do fun hypotheticals. And Taleb says, don't tell me what you think. Tell me what you have in your portfolio. I think that is an amazing question because so many people like to pontificate about this approach or this strategy or the academics behind this. And the thing I really want to know a lot of time is, what do you actually own? Because I feel that's going to tell me a lot more about what you believe in versus the argument or the pros you want to present to me. Yeah, and that led into your next story about somebody you were following on Twitter, I guess, at the time, which I can't wait to hear. But before you go there, I just want to know, so you're not on X anymore? I am not on X or Twitter.

Really? What are you on these days? I'm on nothing. And what's up with that? Why is that? I have three little kids at home, and I already have a huge distraction with just my email on my phone. You're the same way, so I'm not elevating myself above or anything like that. but I get a lot of emails, and one of the things I try to be intentional is to get back to people quickly. So in my dream world, I would get back to every client within 20 minutes, Monday through Friday, Saturday, Sunday, whatever it is. I'm not always great at that,

but I do have a reputation from people of getting back quickly, so I like to keep that. But I, a few years ago, decided I wasn't going to do fantasy football anymore. I wasn't going to do Twitter anymore. I've never had Instagram, mainly because I really want to be present when I'm home. And believe me if you're listening, it's like, I am not like dad flexing on anybody. I have trouble being present at home. So I just didn't need another distraction. But as you mentioned, going into Twitter, I do think, I guess I have to call it X now, but I'm still going to call it the artist formerly known as Twitter. With the artist formerly known as Twitter, I did find at that stage in my career that it was a really good tool for curating content about very specific topics. I could control

who I followed, a lot of people in the personal finance world and certified financial planners. And I used that as a launch pad to read a lot of articles. And I appreciated that time and even the community to beat up some of those articles and ideas. Gotcha. It's interesting because I was never really on Twitter. But when it became X, I started to go on it. And now it's kind of a primary news source for me. So at any rate, that's neither here nor there, but I thought it was interesting. No, I felt the same way. It was like a good news source for me. You do. have to be careful, which I know you already know this, but based on the people you choose to follow, you can create a really nice echo chamber. So when I was in the world of personal finance,

I did try to choose some people that disagreed with each other and folks that I wouldn't follow just to kind of get a more communal conversation. But if you craft it towards your beliefs, you can be very reaffirmed in that tool. No, the algorithm is real. It's really something else. and I will say I am on Instagram and I do from time to time get sucked into the Doom Scroll. So I'm affirming you and I was just curious about it. The one phrase I love that I've never heard before was Dad Flexing. I'd like to be able to use that. I don't know if I can legitimately do it, but thank you for that new phrase.

So tell us about what happened to you with the artist formerly known as Twitter. Yeah, so there's this community of people and there's this, I don't even know, popularity contests, I guess, that some people have more followers than that. others. And there was this gentleman that had a lot of followers on Twitter, and he went to a prestigious university, and he majored in something like computational finance with an emphasis on exotic derivatives or something of that nature. So I read a lot of the content he created, and I found it interesting, and I had the opportunity to meet with him in person here at the Bonzi Group in the office. Now, he ran a fund, so his motivation was to get a new client, but I was excited to learn from him.

So he walked me through his strategy, what he had done in the past and some of his research and how he landed at this particular strategy for this fund and how it could potentially fit into what we were doing for clients. It was a really good presentation. At the end, he surprised me, which I should have assumed this question was coming, but he said, do you have any questions for me? I felt intellectually inferior. So I was a little intimidated, and I just blurted out this question without really thinking

about it. and I just said, how do you invest your money? And he responded innocently too. He's like, funny you should ask. I've invested in this particular strategy for a long time. It's this investment manager out of Boston. And it's a dividend growth strategy. And then he shared some of his research on dividend growth, which aligned with us. And I remember once he said that, I literally just forgot everything he said leading up to that. And I was chuckling in my head because I was like, why would I believe in, and maybe I'm being unfair, so I'm open to you challenging me, but like, why would I believe in anything he said up to that point if that's not how he was investing his own money?

Now, I do understand if his investment goals were just so drastically different that the strategy was managing wouldn't be fitting, but that really wasn't the case here. So did you have further conversation with him or did it just stop at that point and it was over? No, there's pleasantries and I didn't change. my facial expression. I wasn't trying to be rude or anything of that nature. It's just those moments in life that just stick with you. And it just stuck with me at that point is I'm going to try to lead off with that question because I think that's the most telling thing. And maybe this is inappropriate for the podcast, but I'll go here. When I was an aspiring financial advisor,

I worked in a whole different industry. And I just became enamored with this industry and this profession, but it was such a hard profession to break into. And I started at the bottom of the barrel, like any way I could get a foot in the door. And then I just networked through different friends and folks from church to really become a financial advisor. It was not easy. And I remember when I finally got that financial advisor stamp on my business card and I'd gone through some of the certifications, I was then in a training season of my life. And I was eager to meet anybody who had been an advisor for a long time and how they built their business. And I remember sitting in these training sessions where they would teach all these things about how to build a business as a financial advisor and whatnot.

And I would always go up to them at the end and just say, hey, make it simple for me. If you look at your top five or ten clients, where did they come from? Where did you meet these people? And I was always surprised that the stories behind that were just so drastically different than what they taught in this training session for the last hour. So in the world of due diligence, it relates, there's a lot of interesting questions you can ask. But when the rubber meets the road, I want to know, do you practice what you preach? Yeah. And the metaphor that you come back to a couple of different times in the article is to eat your own cooking. You call it the eat your own cooking rule. So maybe tell us a little bit more about that, maybe give us a little more detail. I'm curious,

What does that look like or what would that have looked like in the conversation with that guy that was doing the fund? Yeah, and this rule needs to be a little bit loose. I spent some of my younger years working in a kitchen. I love cooking. And I had the opportunity to work at this, like, nicer restaurant, but I was just the prep boy. Like I would just chop things, prepare things, make the dressings and whatnot. And it was funny because the head chef, he would make all these elaborate meals for. for the patrons, right? But then he would turn around and go get Chick-fil-A for dinner.

And some of that is he's tired and he has different appetites and preferences. But I always thought to myself, if we spend all this energy in making this thing that's incredible and he could eat for free, for someone to turn around and not eat their own cooking, I know that there's secondary reasons behind that. But it is funny when you see an incredibly nice restaurant and the folks that work there in the kitchen are walking across the street. eat Burger King. Beyond preferences, I still think that there's a little bit of humor in it. Yeah. Well, I did not know that about you working in kitchen, so that's a fun, Trevor fact. So let's think about this. I'm just curious. With this guy that you were talking about before,

the Twitter guy, the Twitter guy, the guy of Twitter fame, would you have liked him to say to you, I'm invested X amount in my own fund? I mean, is that what you feel like he should have said in order to be credible in your eyes? What do you think? And we're doing this on the podcast. This is a straight conversation. We're not pre-planning into this. No, no.

I'm just curious. What do you think? Well, I think it's potentially a little complicated because, for example, somebody might be running several different funds, not just one. And each fund could have very different characteristics for different portfolio kinds of goals. Time out real quick, because I want to clarify there. If somebody's running multiple funds and they're invested in one of the funds and not the other, That's logical to me.

I'm more asking you if you're coming to me to hire me as your investment manager, and I'm pitching that I'm going to do X, Y, Z, and providing the historical research and all of this, and then you ask me what I own, and then I own a portfolio of five or six stocks that don't live in what I'm managing for you. Is that bothersome for you? And you can be honest with me. No, no, no. I think if we're going to frame it the way that you just did, and if I'm understanding it properly, In other words, there's more of a global approach that you are pitching for kind of the overall management of your wealth. And you are not participating in that strategy. That would be a red flag.

Yeah, it's a red flag for the industry. Some years ago, a big part of the marketing material was how much of the portfolio managers own this fund and have their own wealth in the fund. There's a downside to that, too. We can talk about, I'm in the midst of reading a book about long-term capital management and how they put all of their money in the fund. And for them, that wasn't ideal as something went belly up and they broke all the rules of diversification. Another conversation. So it's not a fail-safe to say, you can just ask one question if they own the fund, then that's all your due diligence.

No. I'm just saying it's an important question. And it's probably the best question to lead with. Because if somebody says that they don't own any of it, it makes you start to wonder, wait a tick. And I would challenge anybody out there posing as a financial advisor but really pitching insurance products, I'd want to know how many of those insurance products that they own for their own personal balance sheet. Yeah. At a very personal level for whatever it's worth, and I'm not trying to say this to vindicate myself in this conversation.

But my family's money is being managed here at the Bonson, and I couldn't be happier about that. And that is, I don't do that so that I can say it to people and make it a sales point. It's because I really do believe it. And there is a certain intellectual coherence that gives me, I think, as I'm talking to people, because I really do believe in what we're doing. And so I think it's intuitively true to me, what you're saying. I think I'm just wondering a little bit about what the nuances might be.

Yeah, I guess I can put it this way too. You work here. And in let's say this hypothetical world, you decided to put all your money. You work at the Bonson Group, but you decided to turn all your family money over to the Johnson Group. Yeah. To me, if I ask you the first question if I'm interviewing as a client, you're like, well, actually, I'm advocating that you have the Bons Group manager money, but I'm with the Johnson Group. Probably shouldn't have said something that rhymes so well. But to me, that is, I wouldn't even say it's a yellow flag.

That is just a red flag. And one of the things I did in the article is I tried to bring together other examples on why people feel skin in the game is so important. Yeah, I really enjoyed the next section that you talked about on the Buffett deal. So maybe you could tell us a little bit about that and how it links up to what we've been discussing. Yeah, one of the things I mentioned the article is sometimes I get interested in topics, probably like you, and I just go all in. I jump in the deep end. So lately, I know a lot of these financial history anecdotes and stories, but I really haven't slowed down to really study the

time periods and understand all the details. So I've had so much fun lately going back through some of the financial crises historically and trying to understand what actually happened, who are the people involved, and what are the details behind it. So I went back and read a book about 1929, just recently finished Too Big to Fail, which is about 2008, which I was familiar with I've read other books and now in the middle of when genius failed by Lewinstein. I don't know who it's by, but about long-term capital management. One funny theme through all of this on a lot of these different financial accounts is that when people get into financial trouble and they need capital, they often go to the Oracle of Omaha. That is a very common theme where they're talking behind

closed doors and they're like, we're stuck. We need capital or we're not going to make it. And somebody says, have you called Warren? They say, have you called this sovereign wealth fund or reached out to these people? But Warren Buffett is often on that list. And one of the characters in these books that I've read about, they talk about how difficult it is to do a deal with him, meaning he's usually disinterested. And he is going to craft a deal that really matches what's to the best benefit of his shareholders. So in this account of the fall of Bear Stearns and Lehman Brothers, Goldman Sachs was on the ropes and Morgan Stanley and Goldman Sachs were worried about were they going to make it through 2008. And Goldman Sachs goes to Buffett and they say, hey, we need

capital. Here's what's going on. And like he often does, he sets up preferred stock and gives himself a very favorable out. But he put a little caveat in the deal and he said, For these four executives, I think are really influential of this company, over the next five years, they can't sell more than 10% of their stake in the company. One of those executives was on the fence about potentially leaving the company. And even if he left, he wouldn't be able to sell his shares. And if he was going to, Buffett got to sell his shares first. And there was a little bit of tug-of-war on that particular detail. And he told them, he said, I'm not just buying the horse.

I'm buying the jockey too. And to me, it's just such a simple example of why skin in the game is so incredibly important. Yeah. I'm not as much of a student of Buffett as I should be, but is he the one that has said that personnel is policy? Or maybe he's just reiterated that clan, but he's definitely very interested in not just the model of a business, but the people. And so I like that story because it underscores that reality. It reminds me, and hopefully I'm not making too big of a stretch, but it reminds me of what we're talking about. If I'm going to jump in the pool with you, like, I need to make sure you're in here, right?

I want to make sure that there's no sharks in the water, so I'm going to push you in first. A horrible analogy right now, but I've heard that penguins, when they're trying to figure out if it's safe to go in, they usually push one penguin in first. And if he survives, means he doesn't get eaten by a seal or the water's too cold. everybody's willing to go in the pool. And I do think that if this group of executives are coming and saying, hey, we want you to join us, he needs proof of safety. And I think putting that caveat in there is so incredibly important. Yeah. No, again, it's brilliant and it shows his wisdom and his enduring, the enduring nature of his success to think in those terms. I guess it continues, though, to tease out for me that there are potentially some.

kinds of boundaries around this because I think I had read something along the lines of if executives if their own if something like 30% of their wealth is tied up in any one particular company for example the one they're running that they start to either because it's so such a huge part of their own wealth they'll start to overly de-risk or potentially even gamble they go one where the other, to the detriment of other stakeholders and shareholders. So there is this, I don't know if there's a sweet spot or there's just a, it's good to have skin in the game, but it can go too far the other way as well. I don't know if I'm making sense there.

It makes total sense. When I was writing the article, I was thinking about that exact thing or in the same neighborhood of what you're talking about. And that's why when I concluded, I wanted to say, this isn't the only rule, right? We're making this world up where you can only ask one question. But I can give you plenty of examples where people had a ton of skin in the game and it did not work out well for all the stakeholders. So when you start breaking some of the rules of diversification and things like that, it's in concert with these other questions that I think make it important to get a full picture. Yeah.

No, I think that's a great nuance. Tell me, as you moved into the next part of this article about the peace child story that you offer up here and help me help tie that in for me. because I didn't quite understand the tie. Yeah, of course. So have you read that book, Peace job? I have not. No. Okay.

So the way my brain works and to the detriment of all the podcast listeners and the readers is when I start to think about topics, I usually take notes on my phone. And I'm just thinking through my own past life, what things are familiar here and where do I see patterns. So there's this book I had to read at Biola. And I enjoyed it, so I'm not complaining about reading it. But it was about this missionary in New Guinea. And he basically is talking through this book, his biographical example, of how much trouble he was having sharing the gospel with these people. And one funny anecdote from what he talked about, he told them the story of the gospel. And they were more of a fan of Judas than Jesus.

Have you heard this before? I think I've heard that. And they were like, man, like Jesus was silly. He totally got duped. We want to be more like Judas than Jesus. and the gentleman that was a missionary was like, ah, like they're totally missing this. And he was trying to find a way to relate this story.

So he coined this term of redemptive analogy. How could I take something that's culturally relevant to these people and be able to deliver the gospel message? And I don't say this from any sort of religious angle. I was just saying that he was trying to figure out how to communicate. Well, they had this practice in their tribal culture where if there was another warring tribe, one of the ways that they created peace

was that their tribe would give one of their children an infant to the other tribe and because now this child from your tribe is being raised by the other tribe it creates a time of peace and they actually call it the peace child

that they now no longer want to attack those people because they'd be attacking one of their own like it's of their blood. Up to this point does this make sense? Yes. So for me, It doesn't have to make sense to you, but for me, I think that is the best example of skin in the game. Because it is literally skin in the game.

Like they are not going to do something harmful to that other tribe because if they did, it would be doing something harmful to themselves. And investing, I think that's important. Brett, if I'm going to be responsible for your money, it is very nice if my money is commingled with your money and our incentives are aligned. Well, maybe not commingled, but. Sure. I'm using that term. I'm using that term loosely. But if I am choosing an investment portfolio and strategy, I think it is in both of our best interest that if it goes well for you, it goes well for me as well.

And for me, I like to take examples outside of finance to stretch our minds a little bit. And I think this idea of a peace child is the best example I could think of aligned incentives. Yeah, that mutual self-interest that are shared with someone else. Yeah, and I don't think it's asked enough in due diligence for a customer vetting out different financial advisory practices. Because people have asked me before and they're like, they'll give a ton of disclaimers. Trevor, I'm going to ask you a question. Hopefully it's not too personal. Like all these things like, are you invest in this strategy?

And I'm like, absolutely. That's a great question. Like, I won't show you the dollars and cents, but I will. show you the allocations of my portfolio. I will pull back the curtain. I think that's an amazing question for you to ask. I don't know why that's an uncomfortable question culturally for us, because I think it's, again, the best question to lead off with. So maybe help me think through something. I am in substantial agreement with you about the skin in the game alignment and so forth, how does that relate to a fiduciary standard? So if somebody is a fiduciary, is that enough?

Or do you need this skin in the game component as well? In other words, somebody is a CFP. They're supposed to be a fiduciary. So they raise their hand and say, hey, I'm a fiduciary. I have to do what's in your best interest, but they may not have the same skin in the game. How do you think through that? So I want to be very clear that I don't think anything is perfect. So I don't think skin in the game, standalone is perfect. And I give a ton of examples of when it wasn't, right? So we're in agreement on that.

I do think it's important, but I don't think it's the Holy Grail or anything like that. I think it's a high priority to ask that question first. So when you're asking about a fiduciary, I think that one of the easiest definitions is that a fiduciary has a legal responsibility to act in your best interest, right? But one thing that we learn about economics is that incentives, drive behavior. So beyond my legal responsibility, does it make a lot of sense for me to have an incentive to act in your best interest as well? I think so. So I would say that the skin in the game principle really drives that incentive. And I'm going to pick on to Seem Teleb a little bit too.

There was, I don't remember when it was, maybe like 2022. There was a fund that he supports or somebody that he's in close contact with. And he was making all the headlines about how this particular strategy had these incredible results, like unbelievable results in this heavy time of volatility. Right? So I went and read,

I think the guy's name was Mark Spitznagle, the book that he published, and I read through the whole book trying to see, where's the secret sauce of what they're talking about? I don't even know what they were doing, right? But most likely they were buying these incredibly out of the

money puts, which is like insurance. I can't catch our podcast listeners up completely, but I know you understand what I mean. But buying these out of the money puts that are like insurance, that when they pay off, they can pay off huge, but they might only pay off every seven to ten years. I'm making up a time period, but you could own them for a long time. So the drag of the cost before they pay off can be perhaps more than that payoff. Again, we'd have to look at the actual numbers. The point I make, is that if this article about Taleb is highlighting how in this particular month of heavy volatility, this fund went up this jaw-jopping percentage, my question would be, what do you own?

Because if you've been paying that quote-unquote portfolio insurance for the last decade when it really wouldn't have meant much to you, and now we're just highlighting when it has like a flashing green result? So I would pose the same question back at him. What does your portfolio look like? Because I would want to understand in a full market cycle how that performed, not in this particular moment where everything was red and it was green. Right. So part of what you're saying, if I could just rewind a bit, is as a fiduciary, especially because my financial incentives are aligned, for example, with my client's performance, that is a form of skin in the game as a fiduciary. Is that part of what I'm hearing you say?

I think it's fair to say that. Can I pose a question back at you? Sure. Okay, you're interviewing me as a financial advisor and you know I'm a fiduciary. Yeah. And then you asked me where my money is what I'm invested in. And then I tell you, oh, I have this other financial advisory practice manage my money. Is that bothersome to you at all? Because I'm still a fiduciary. I want to say, as I'm thinking this threw out loud on the fly, but it might depend on what the goals are.

certain strategies might be more appropriate for certain goals. Let's assume that every strategy, let's assume that there's a wide array of strategies available at this fictitious practice that I work at. Yeah. And I'm choosing to go elsewhere. It doesn't have to be bothersome for you. It's definitely bothersome for me. Yeah.

No, like I said, it's a red flag. It's a red flag. I was just trying to understand, because I think in our industry, people talk a lot about a fiduciary standard as if that, that, you know, that alone is sort of the thing that's going to solve for this due diligence question that you're asking. And I think I'm hearing you say, no, no, just the fact that you're just a fiduciary does not solve for that problem in and of itself.

Yeah, this is so outside the scope of the conversation, but I just want to bring this up. Let's imagine you're the owner of fill in the blank on any professional sports team. And I know what I'm about to say is incredibly. legal, so not allowable. But let's say I'm the owner of make up a team name, right? I want to think of a name that's not a real team name. I'm the owner of the swordfishes, right?

I'm the owner of the sword fishes. I actually literally don't have much influence on when the swordfish is play today. I'm up in the booth or anything like that. And I really think the swordfishes are going to lose this game and I love gambling. If I bet against the sword fishes, what are your thoughts on that?

Like, I have no influence over the game. I'm the owner. Are we trying to talk about? Pete Rose right now and whether he should be in the Hall of Fame. Didn't Pete Rose bet on himself? We're in his gambling for the Reds. I was going to say, I'm pro Pete Rose. I'm pro Pete Rose.

There's a TV commercial where he was in the hallway and somebody comes down and says, Pete, you know you're not allowed to be in the hall. Yeah. No, I mean, oh man, Trevor, I've got to be more prepared for that question. At a gut intuitive level, it doesn't feel good. Okay. I'll just leave it there, I think. At a gut level, it doesn't feel good.

I could probably sit and rationalize some reason why it could be okay. But then I'm in my head. This is a totally inappropriate topic for this podcast. And then I'll pull this back. But one of the things I've been, and I'm not going to write an article on this, but one of the things that I've been disappointed at our industry is how many financial advisors don't follow their own financial advice and find themselves in heavy financial trouble. I'm delicate for saying that because I don't want to lack compassion.

in the way that I describe it. But there's that old adage, right, like the shoemaker's kids go barefoot. The way that I'm wired, I want to make sure the way I invest my money and the advice I give is the same way that I invest my own money and the same advice I'd give myself.

I feel crummy if I would give advice to you and then go do something else, even from a planning perspective, on my own financial plan. Now, there's allowance for new ones. there, different stages of life, preferences, goals, things of that nature. But the general principle, I really want to align the way that I execute my own lifestyle financially matches what the advice that I'm giving to clients. Yeah. No, hey, I think it's a very interesting discussion because, again,

people are trying to discern what's real, what's not, what's prudent, what's not. They're potentially depending on a certain person for advice. And in the, you know, ether, they're told, well, are they a fiduciary? How are they paid? As if those are the things that are litmus tests, you're kind of introducing a different kind of litmus test, which is how does that person actually behave themselves, which I think is super appropriate. It lives in an ecosystem with other kinds of litmus tests that people are thinking through. And to your point, it's not about picking one of them. But it's just interesting to think about this almost in contrast with some of the others. Yeah, and we will wrap up with this last topic because I'm not the

first one to think about this. I wrote a section in the article called Cleaning Up After 1929. And the Great Depression is an incredibly interesting time to study about lots of history, but especially financial history. And I'm not advocating for this regulation, nor am I critiquing it. But one of the regulations that came out of that was that executives with significant ownership and companies and influence needed to start reporting their trading. Right. And if they were buying shares or selling shares, because there were accounts of 1929 where executive leaders were actually shorting their own stock. And somebody decided on Capitol Hill, which they don't always make the best decisions, but that, hey, it's actually important for shareholders

to know the activities that executives are making. Do you think that's important? No, I do. I mean, I think it makes sense that we would understand how key, shareholders and leaders in an organization are behaving with their own shares. So I think that's good legislation. I think the questions that it raises for me are what workarounds has that actually created? Because that's inevitably kind of what happens is people just find ways to game the system and different kinds of camouflage. And so some of it starts to become a little bit performative. And I think it's actually been floated that wealth advisors should have their whole portfolio be transparent. I hate to say it, but just totally bare naked to your

clients so that they can see exactly what your portfolio looks like. And that probably would be an answer, but it feels pretty intrusive. But again, you don't want to financially address yourself in the world? I'd rather not. But it's very interesting because I think it's good legislation, but it does raise other questions because it's not going to, as you've said, it's not a perfect world. It's not going to solve it for everything. Yeah, I'm with you and that's why I'm not personally equipped to argue for or against the legislation. But I was just mentioning that, hey, after what happened in 1929, a lot of people were wondering, hey, let's do a postmortem. What was actually happening behind the scenes? And there were even some

things where the CEO of a bank sold his shares to his wife so that he could report a tax loss. and he was challenged and he came a poster child, as often happens, whether that was legal from a tax perspective. So again, not here to argue for against the legislation, but more about, huh, it is important for me to know that somebody that is an influential leader at a company that has skin in the game, I want to know their activity. And obviously Buffett wanted to know it too

because he didn't want to be the one holding the sack of potato, if things went awry, he wanted to be able to act at the same time or before the people that had the most intimate knowledge. Because I assume the folks leading are going to have the most intimate knowledge a majority of the time. Well, it's a truism that you pointed to early in the article. But ultimately, we need to be paying attention to what people actually do, not just what they're saying. I think that principle just shines through in the example you're giving. So let me ask you, Trevor, from the standpoint of the, folks who are evaluating advisory relationships. You think that a valid question for them to the

advisor would be, are you eating your own cooking? I think it's an incredibly valid question. And if somebody doesn't feel comfortable answering it, that's okay. I think transparency and vulnerability are important for the relationship advisors have with clients because the advisor expectation is what, that the client is going to trust them. So to be able to ask some of those hard questions, I think is appropriate. What sparked the idea for this article is I was meeting with somebody that is nearing retirement, and they had done it on their own for a long time period, and they'd done quite well from a results standpoint. And when we got to the point of actually reviewing their portfolio, I came to find that about 40% of the portfolio was in two stocks. And I was like,

oh, I actually didn't know that coming into this. We had done all the math that the amount they saved made sense for the amount they wanted to spend and the retirement date would work. But then at that point, they're not a client. I said, hey, I take back everything I said because you're breaking this huge rule of diversification. And by owning this much concentrating these two companies, it's like an outsized risk that you just really don't need to take. And he asked me to be candid. So I felt completely comfortable doing this. But he went on to say that with this particular company, he was confident that the stock price was going to go up four times in the next five to ten years. And I respectfully told him, that's probably

the most arrogant statement I've ever heard, because neither him or I have any idea what's going to happen with that particular company. And the rules and laws around diversification exist for a reason. And one of the things I told him, because he challenged me a little bit on that, I said, I think about this stuff a lot. I've studied. this stuff for a long time. This stuff matters to me, even for my own money. I have the ability right now to go buy those two stocks as a 40% allocation to my portfolio. I could do that. I am not going to do that. So I think one thing that could have been helpful for him is that if Trevor's thought about this a lot and if he's walked through a lot of strategies and if he's beat them up even for

his own money, there's something to be said about how his portfolio is designed is the exact design of portfolio matching what he should do? No, but it tells a little bit of the story that would probably be a lot more helpful than 10 or 20 other questions that naturally come on somebody's basic due diligence question sheet. Yeah. No, it's a great story. I appreciated this article. I think the principle is sound and the anecdotes and stories that you shared are very relevant and helpful to unpack it. So thank you very much. Yeah, and really what I wanted to provide, and that's where I concluded is that due diligence is important. You should do it. You should ask lots of questions. You should slow down the process when you're hiring a new investment manager or a financial advisor. There's no urgency needed. And the time should be to be able to ask questions to sit on those questions. And as you sit on those questions, it's going to spark other questions. But if I can help you at all to shorten your process as you're vetting out different folks, maybe you just start with this question. How do you invest your money because I'll tell you this I sat in my office for an hour talking to this

Twitter friend and I was incredibly intrigued and the answer to that question I immediately deleted everything I'd heard the last hour and my opinion was I think the way he invests says a lot more about his beliefs than what he just pitched me on and yeah where your heart is your treasure will be too or how does that go something like that so I think where your investments probably are says a lot about what you believe about investing. So with that said, we'll close out the podcast. We appreciate you listening. We've had some great email interactions with listeners and readers.

So keep those coming. You can email Brett or Trevor at TomT-O-M at the Bonsonagroup.com. You can rate the podcast, five stars are preferred. You can leave comments on the podcast app. And then we will be back next week with more of our thoughts on money. The Bonson Group is registered with Hightower Securities, LLC. Member Feenra and SIPC, and with High Tower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through High Tower Securities, LLC.

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