We Study Billionaires - The Investor’s Podcast Network - TIP 028 : Think and Grow Rich - Napoleon Hill (Investing Podcast)

Starting point is 00:00:00 This is episode 28 of The Investors Podcast. Broadcasting from Bel Air, Maryland. This is the Investors Podcast. They'll read the books and summarize the lessons. They'll test the waters and tell you when it's cold. They'll give you actionable investing strategies. Your host, Preston Pish and Sting Broderson. All right.

Starting point is 00:00:29 How's everybody doing today? My name is Preston Pish, and I'm your host for the Investors Podcast. and as usual, I'm accompanied by my co-host, Stig Broderson, out in Denmark. And if you haven't noticed yet, I'm trying to get over a cold. And it's just not going so well. I've been having a rough week, and we're still going to do this podcast. But if I sound a little bit different, that's what's going on here. So I just want everybody to know that.

Starting point is 00:00:52 So if you hear me squeak, don't be surprised and don't laugh too hard, because I'm probably going to keep it in the podcast and not edit it out, just so everyone can get some amusement. All right, so let's just hop right to it. The episode today is going to be on a book that Stig and I recently read. And I actually read this book a while back, reread it just to familiarize myself again with it. And this is one of those books that it's going to be a lot more advantageous than just reading it once. And the book that we're talking about is the book called Think and Grow Rich.

Starting point is 00:01:26 So before we jump into the book and start talking about all the details of it, I want to throw out there that, this book was not just by Napoleon Hill. This book was a compilation of thoughts by some very powerful people back in the late 1800s and early 1900s. Specifically, I want to start off with a story of how this book originated. So there's a gentleman named Andrew Carnegie, and I'm sure many people in the United States know who Andrew Carnegie is. But if you don't, Andrew Carnegie was pretty much the founder of steel and the development of the Bessemer process. And he lived in Pittsburgh, Pennsylvania. And in 1901, Andrew Carnegie sold his company, the steel company, Andrew Carnegie's steel company,

Starting point is 00:02:15 to J.P. Morgan for $480 million back in 1901. So if you're wondering what the value of that is in today's dollars, that's the equivalent of $310 billion. So that's like three times more valuable than what Bill Gates' net worth is today. Just to kind of give people an idea of who Andrew Carnegie was. So he was one of the most wealthiest people of all time. And what Andrew Carnegie did is he wanted to solicit a journalist to write down his elements and his ideas of what success was all about and how he basically acquired all the wealth that he gained.

Starting point is 00:02:55 And so Andrew Carnegie solicited the help from a gentleman named. Napoleon Hill, who's the author of this book, Think and Grow Rich. And he called Napoleon Hill into his office. And Andrew Carnegie said, you know, I really want to write this book on success. And I want to, you know, capture all the finer elements, all the critical variables that lead to the success of the wealthiest people in America. And so he ran this idea past Napoleon Hill. And Napoleon Hill was really excited. And he says, you know, I'll open up. every single door for the top 500 wealthiest people in the United States to help, you know, give you these ideas. And so Napoleon Hill, they're all excited thinking that he's going to get a, you know, a huge incentive bonus for signing up to write this for Andrew Carnegie.

Starting point is 00:03:47 And then at the very end of Carnegie's pitch to Napoleon Hill, Carnegie says, and you're going to do this completely for free. I'm not going to pay you anything to do this. So what do you say? And Napoleon Hill was just kind of taken back. And he actually wrote about this and talked about this in some of his notes about how he was just like stunned and didn't really know what to say to the offer. And after a little bit of time, Napoleon Hill said, okay, I'll do it. And he didn't really know why, but he just said, okay, I'll do it. And what was interesting is Andrew Carnegie from underneath of his desk lifted up a clock that he was stopwatch.

Starting point is 00:04:26 that he was timing Napoleon Hill. And he said, you had one minute to make that decision or else I wasn't going to continue with the offer. And you made the decision in 46 seconds. So let's go ahead and do this. And so that's kind of how this book got started. That's how this all kicked off, which I thought was an amazing story.

Starting point is 00:04:45 So what's even more amazing is Napoleon Hill took on this project. And I think you just heard me squeak. So I'm going to keep that in there just so everyone can get a good laugh. But so Napoleon Hill took on this project. and he did this over a 20-year period where he was researching and studying all these people that Andrew Carnegie opened the doors to. And in the end, Napoleon Hill ended up writing a 22-volume set of books. So this was not like a simple book like we have right now, this thing can grow rich. It was a 22-volume set of books.

Starting point is 00:05:18 And in those books, he outlined 17 elements for learning all these variables to success, which were all learnable. They weren't things that you inherently had to possess. They were all things that you could gain through studying and through focus and through doing it consistently. And so this book, this compilation of books was absolutely enormous. And it was really a hard sell, especially during that time in the early 1900s. And so it went nowhere, which was kind of interesting. And then Napoleon Hill basically took those volumes and he narrowed it down to a thousand-page book. and it still went nowhere.

Starting point is 00:05:56 And the 1,000-page book, I think, came out right around the Great Depression. It didn't really have much of a market. And then by 1936, the publisher took that 1,000-page book, and they narrowed it down the 250 pages, and they sold it as this title, Think and Grow Rich. And that came out, like I said, in 1936, which was right before the next major market crash, which happened in 1937 for all you history buffs out there. But a fascinating book. And this went on to be the 9th,000.

Starting point is 00:06:23 number one selling success book of all time. So just to kind of give people a background on what book we're discussing today, because some of the stuff that we're going to be talking about are kind of obscure topics. These are things that I think a lot of people never talk about because they're a little off topic and a little strange, if you will. And so when we start talking about this, you got to realize that's the background of this book. This isn't like we're just reading some random book that's a little strange and out there. This has a significant, amount of very important people out there that have contributed to this book. So I just want to throw that out there at the beginning so you kind of understand the foundation of what we're

Starting point is 00:07:02 going to be talking about. So Stig, did you have anything on the background or anything like that that you wanted to add? No, not really. I think that the first thing I want to talk about is, and actually I think they mentioned it, was that these personal traits, they're all free to acquire. And that's really a good point. I really love this. So you don't need to, you know, pay a lot of to get a college degree that is not from Napoleon Hill is saying. He's saying that with your own mind, you can basically do whatever you want. And you probably heard this before. And especially if you dig into more of these success books,

Starting point is 00:07:36 you probably heard a lot of these things about, you know, you're putting, you are the only person who put a limitation on yourself. But basically, at least in my opinion, that's probably because most books are written based on thinking grow rich. I haven't read this before like Preston, but I kind of felt like read it. like dozens of times before because it pretty much summarizes this book, I think

Starting point is 00:07:59 Greg Rich pretty much summarizes like a lot of the great points that all the authorities and leadership and self-development has. So there was something that that really struck me. Yeah, and you'll notice people like Tony Robbins, if you're a big Tony Robbins follower, isn't that worth like about a half a billion dollars? He is huge on this book on Napoleon Hill. I think this was one of the foundational reads for him in his life was this book. Another person that is real big on this book is Brian Tracy. For anybody that follows Brian Tracy, this was one of the foundational reads for him. And I think that if you went back and you looked at a bunch of different people, a lot of different billionaires and people that have been very successful, they might not come out and say that this was the book that kind of set them on their path.

Starting point is 00:08:44 But I would imagine that it might have been. And there's a lot of people that point to this book as being just one of those. keep turning points in their lives. So Stig brought up a great point that you don't need to have anything in order to start this journey. And as the title suggests, think and grow rich, it all starts with your mindset and your ability to control your thoughts. So the thing that I really want to say, and I want to say this key sentence for people because it's very important. The book says that your focused thoughts will actually bring your intangible desires into physical reality. So let me say that one more time.

Starting point is 00:09:22 Your focused thoughts will actually bring your intangible desires into physical reality. And that's really the premise of the book is that what you think about most and what you really desire and what you want. If you think about that long enough and you focus on it and you consistently go back to that thought and that idea and you do it over and over and over again, that your subconscious mind will help you develop that into the material. world that you live in in this physical world that we experience. And I think for a lot of people, that might sound really, really far-fetched. But that is the point of this book. So really profound, really an amazing thought. And to think that, you know, that idea really came from Andrew Carnegie and some of these other, you know, enormously wealthy people. So it's not like Preston Pish is saying that, or even Napoleon Hill is saying that. That's coming from these

Starting point is 00:10:18 these people that have had enormous success. So go ahead, Stig. I see you have a point. Yeah, I have a question for you because there was something I really thought about when I read this book because what Napoleon Hill is saying is that 98 of 100 people that don't have success. And that was something that puzzled me since this is a best-selling book and it's free for everyone to acquire.

Starting point is 00:10:41 So, Preston, if I had to ask you, why do you think that so few people really succeed? because I would argue that the ratio is probably the same today. So with all the knowledge that we have today, what are so few people actually succeed in what they're doing? I really succeed. I definitely think that the reason why is that people would read a book like this and they'd say, oh, you know what? I agree with all that stuff.

Starting point is 00:11:03 But then they never do any of the steps that he outlines in the book. Because, I mean, it's not simple. It's something that you've got to do consistently every day. It's focusing those same thoughts, having faith, which I think is the hard part. And we'll get into that discussion. And I think that's really what separates people that apply this book successfully versus that don't apply it successfully. It really comes down to that faith element that they actually believe the thoughts and the ideas that they're, you know, putting or at least trying to put into their physical environment.

Starting point is 00:11:33 So I guess I wanted to start off with this. So if you walk down the street and you ask 50 people these two questions, what kind of response do you think that you'd get? The first question would be, what are you doing today to improve your salary and, to actually make it larger for tomorrow. What do you think people would say? I think most people would just say, I'm going to work. You know,

Starting point is 00:11:55 I don't think that they'd have much of a response. Do you agree, Stig? Yeah, I think they would probably say work overtime, something like that. Yeah, I agree. The next one is, what net worth do you plan on having when you're 65 and how are you going to achieve it?

Starting point is 00:12:10 What are you doing in order to achieve that specific amount? and so somebody might say, oh, I want to have $3 million or I want to have $500,000, whatever it is. I think that if you ask 50 people that, I think you'd be really hard pressed to find anybody to say an actual amount. I think they'd just say, well, I want to have enough to be able to retire by the time I'm 65. It's probably what they'd say. But they would, I think you'd find less than one or two percent of people that would be able to say, I plan on having $5 million whenever I'm 65 years old. Do you agree, Sting?

Starting point is 00:12:45 Yeah, I completely agree. And I think there was the forementioned Brian Tracy. I'm a big Brian Tracey fan. And he's saying that only 3% of Americans that have written down the goals. And I think that's really much in line with think and grow rich. Like you need to be really specific and you need to write down goals. And not just be thinking, well, it's probably nice for me to be a financial independent.

Starting point is 00:13:06 It's something different to say, I need $3.4 million. by the age of 65, and these are the six steps I need to take. I mean, I think very few people are actually doing that. Yeah. So that's one of the things that the book talks about. So asking those questions, just to kind of make you think, okay, so now you're listening to this, could you answer either one of those questions? And if the answer is no, that's no big deal, because we're going to lay out the steps that

Starting point is 00:13:31 it says in the book. And we're also going to send out our free executive summary on our mailing list to anybody that hasn't read the book, that they can quickly go through that. and they can see what the book's all about. And then if you want to read the book too, which I highly recommend, you can do that. But so here's the steps. These are the basics. And I think there's a lot more to this than what we're going to discuss in the short, you know, podcast.

Starting point is 00:13:54 But the first thing is that you need to set the goals. You need to write these down and you need to know what it is that you want. Don't worry about how you're going to get that. First, focus on what is it that you want, okay? And you might want to figure out why you want it. Say you want $5 million. Why do you want $5 million? Figure out what that dollar amount is.

Starting point is 00:14:14 Okay, and then here's the second part. What are you going to do to achieve that goal? Or what are the steps or the ideas that you have that you'd maybe like to use in order to get that? Because you can't have value without creating it first. You have to give it in order to receive it. But start with what you want. Then figure out what it is that you're going to do in order to get it.

Starting point is 00:14:36 And then here's the big point. This is the key point. What is it that you're going to provide to society that's mutually beneficial for that product or that asset or whatever it is that you're going to do, that service that you're going to create in order to receive it? So say you want $5 million and you're going to stand up a new company that does whatever. How is that company's value adding to society? How is it making it better for society? And that's what brings things full circle for you to actually create this. this value that you desire.

Starting point is 00:15:10 So this is where it gets a little bit funky for a lot of people is that Napoleon Hill starts talking about the power of your subconscious mind. So everyone is real familiar with their conscious mind and what they do on a day-to-day basis. But I think very few people actually understand Napoleon Hill's position, at least, on the power of your subconscious mind. And what Hill outlines in this book is that whenever you have a desire, for something and that you're saying it continuously to yourself and that it's actually becoming a part of you and that you have faith in that this will happen.

Starting point is 00:15:47 What you're actually doing is you're putting a seed into your subconscious mind and your subconscious mind is what actually brings that idea and that desire into reality for you in the material world. And so that's a very obscure idea and that's a very, you know, that's not what most people think or have ever even talked about. But that's something that he throws out here in the book. And so then he starts talking about in depth how you can energize and actually start planting these seeds in your subconscious mind so that you can actually make these things materialize.

Starting point is 00:16:22 And Napoleon Hill talks about there's three elements that you can use to actually energize or actually create more gain or magnitude behind those thoughts and those desires into your subconscious mind. And he says the three things are. are these. He says, you've got to have faith. So if you actually believe that you're going to amass a million dollars by the time you're 65 or whatever the number is, and you believe that you're going to be able to create that value with whatever product or service that you're creating, and you believe that it's going to create value for society, well, then the magnitude of that

Starting point is 00:17:01 thought and that desire into your subconscious mind is going to have a lot of potency. It's going to have some actual effect to it. But if you don't believe it and you don't think that that can actually happen, you're going to have a hard time energizing and actually putting use of your subconscious mind. The next thing that energizes your subconscious mind, and I'm going to say both of these at the same time, he says that love and sex actually have a impact on your subconscious mind and the way that you can plant ideas and desires into it. So I'm not going to get into those two very much because those probably aren't my forte. I'm sure my wife would have some comments on that, but we'll leave that aside. But I think the first one is really important,

Starting point is 00:17:46 which is the faith, and that you actually believe these thoughts and these desires that you want and that you have total confidence that the universe, your God, or whoever you keep your faith in, as long as you have that faith in those thoughts and those desires, that it will actually come into the material world for you. So, very much. very interesting thoughts, a very interesting discussion. Stig, do you have any follow-ups on that one? Yeah, I think about faith, and I know we'll be talking about persistency later, but I think that those two are really interrelated,

Starting point is 00:18:17 because, you know, we all fail, and we all repeatedly fail. And one of the things that Hill writes in his book is that, you know, the people that are really good at bouncing back, these are also the people that will succeed. I think there's this myth that, you know, some people, people just, you know, get success. They really don't. The curve is definitely not linear towards success. And I think that what really separates a lot of these people is that they have faith.

Starting point is 00:18:45 They know that they will succeed in the end. And they're ready to take, you know, to be rolling with the punches that life will just bring them on the path to that. So I think that a lot of people might have difficulty with this piece of it. Because let's say that I'm a person making a smaller salary. and I have the desire to amass, call it $10 million. And I think for that person, it's going to be really hard for them to have faith, even if they go through the practice of what Napoleon Hill talks about by continuing to try to plant that seed in your subconscious twice a day and doing that. I think the person is going to have a very hard time having the faith in their desire for whatever it is that they want.

Starting point is 00:19:27 And so for that person, this is what I'll tell you. And it's advice that Guy Speer gave us on a podcast, probably a 10 podcast. ago and guy says sometimes you just got to fake it until you make it and I really like that because I think that there's a lot of truth in that. I think that if you go through this and they talk about the idea of auto suggestion in the book where you're constantly saying it and you're constantly repeating it to remind yourself that this is a very important piece of something that you want and I think that if you continue to fake that and you continue to say it, I think that if you say it enough, you're going to start actually to have faith in it and you're going to start to believe that

Starting point is 00:20:04 you are able to accomplish it. And I think that you need to pay very close attention to the clues that come in your life because I'm of the opinion that there are very interesting things that have happened in my life and that the universe will interact with you in a very unique way at times. And that sometimes you're giving clues and you're given ideas. And I think for a lot of people, they just write them off as being nothing or they have a dream and they just write that off as being a nothing. And I think the closer that you pay attention to those little details of things around you every part of the day, I think you're going to start to pick up that maybe you are being helped and being guided in the direction of whatever your desires are.

Starting point is 00:20:48 So I want to throw one other idea out there. And there's another book. If you're, you know, learning about your subconscious mind for the very first time, you've never read any books on it. There's a lot of good books out there. The one that I'd recommend that I would read together with this Napoleon Hill book is there's a book called The Power. of your subconscious mind. I would definitely read that. It has fantastic reviews.

Starting point is 00:21:07 I've read the book myself, and I think it's fantastic. And if you're not really understanding all the points that Napoleon Hill talks about in this book, you might want to compliment it with that other book. So I just wanted to throw that out there. So let's go on to the next piece of the book.

Starting point is 00:21:23 And that was the idea of specialized knowledge. So I'm going to have Stig talk about that one. Yeah, I really love this because you're starting by saying, you know, professor, they have a lot of knowledge, but they don't make any money. No, but it is true, and I think he had a lot of good partners about specialized knowledge. Because he says it's really not the amount, total amount of knowledge that you have, is how you organize it and how you carry that knowledge out in the world. And I think that was really fascinating.

Starting point is 00:21:55 And then he was talking about, you know, I'm not linguistic, so I might be wrong here, But he's saying that it's from Latin, Educo, which means to reduce. And that was something I found really interesting. Like, you need to reduce knowledge. That's really the key here. And I'm thinking here in 2015, in the age of the internet, and we get so much knowledge. And I just heard the other day that the amount of knowledge in the world that doubled every three years, and it goes faster and faster. I would say today, and Napoleon Hill is right on the money here, today, whoever is best at filtering that knowledge.

Starting point is 00:22:29 And, you know, I think those people are the most successful people, really. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering,

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Starting point is 00:26:21 today with the industry's best business partner, Shopify, and start hearing, sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. So in the book, Napoleon Hill uses Henry Ford as an example of this. He said, Henry Ford never went to college. He just had, you know, the high school education. But what Henry Ford knew how to do was he knew how to assemble a team, assemble people together and all the knowledge together. And whenever he had all that knowledge, he was able to organize it in a manner so that he could actually put it to practical use. And he says, like Stig said, all the knowledge in the world is useless. If you don't know how to apply and put utility to it for society,

Starting point is 00:27:21 So, Stig, I saw you smile and what did you have to say? Yeah, he's saying that college education has no point. He's miscellaneous. I also laughed when I heard about that. You know, I feel so proud about what I'm doing. But I actually think he has a good point. He says that it serves rather as a medium where you get to learn how to acquire specialized knowledge. So in that sense, I'm not saying a college education is useless.

Starting point is 00:27:48 And, you know, if I did, I really hope my students would listen. to this podcast, where some of them are. But, you know, I think that this is really the, you know, if you get an education, I think the main thing to get out of it is that you get the tool to be further educated, to get the specialized knowledge. I think that's really where you reap the benefit of education in any way in life. So, so I think that Napoleon Hill was completely bright about that. So the next one that we're going to cover is persistence.

Starting point is 00:28:19 So this one here. I can say from my own self-experience of trying to create a company, to building a brand, to doing all that kind of stuff, persistence is absolutely one of the biggest things that you can do to be successful. And so he's not just talking about persistence of your thoughts by going back twice a day and thinking about the same things that you desire and what you're going to do in order to produce that. But the persistence of actually executing. So like Stig and I, so I get up very early. every single day. If I told you, you probably wouldn't believe me, so I won't even tell you the time. But I get up very early every day to do the same mechanical type steps as far as the business, the online business, to editing, to writing, to doing all that stuff. And I do it in a very consistent manner. And I'm very, very persistent with that. And I know Stig is, too, he just has a different time that he actually does his persistent acts.

Starting point is 00:29:18 But I think the point is this. if you're not doing something persistently, it's going to be very hard for you to create whatever value it is that you're trying to create in order to achieve whatever goal you have. So figure something out, whether it's a half hour, an hour, four hours, whatever that is, you need to set the time limit. And for people that are just starting out, I tell you set a very small time limit and build yourself into it because the further you get down the path, you're going to start seeing the impact of being persistent.

Starting point is 00:29:49 So if you start off with 30 minutes every day, I'm going to do whatever. And you do that every single day for 30 minutes, every single day. Next thing you're going to know, I'm like, oh, you know what? I have more work to do. So maybe I could, and you're just going to find yourself now moving that to one hour a day. And now you're doing it one hour a day. And then it's going to move into more. And next thing you know, you're creating something huge.

Starting point is 00:30:10 And that's what's going to, you know, really lead to your success to be able to materialize what it is that you desire. So go ahead, stick. Yeah. And this is really the trick, is that you need to pay all this in advance. You really need to pay the price in advance. And I think that's really the hard thing, because it's really hard to be persistent when you don't reap the benefit. When you're doing the same thing, getting a really early morning or working for weekends

Starting point is 00:30:34 or whatever it is that you're doing, you know, day after day after day. And you are just, you know, you probably don't see any progress or perhaps you see progress, but you can see that you won't reap the benefits until two, three, ten years. and I think that's where most people, I think this is where they quit, and then we have very few people who just continue doing what they're doing.

Starting point is 00:30:56 It's not because they're smarter, it's not because what they're producing is better in any way, but they're just persisting in what they're doing. I think a lot of people have to see something tangible in order for them to think that it's actually paying off.

Starting point is 00:31:09 And I think that's probably one of the biggest misnomer's in life is that you have to see something tangible. There is so much intangible value that you can create for yourself that will sometimes transmute itself into something tangible later on, but you have to wait. The time element is the thing that you've got to take out of this because as you wait for it to occur, it will occur. It will be paid back to you, but it's just a matter of when will it be paid back to you. It might be tomorrow. It might be in 10 minutes or it might be in 10 years. But you have to have faith in the fact that it will come back to you. And

Starting point is 00:31:43 whenever you make that transition and you make that leap of everything, that I give, I will receive. And it needs to be in that order because I think most people just automatically think, the only way I'm going to have something is if I take it. And they operate their whole lives like that. I would say a majority of people operate that way. But as soon as you understand that that's not how it works and that it actually works in the exact opposite manner, that you, everything you give is what you'll receive.

Starting point is 00:32:13 I think that whenever you understand that and you understand that most of the time, you have to do a lot of intangible acts or all your values being stored in intangible returns and then all of a sudden it will start transmuting itself into a tangible result. I think when people understand that they're going to have a huge leap in their amount of success that they see in their lives. All right. So Stig's going to go ahead and introduce this next idea. This is the last one we're going to talk about in the book, even though there is plenty

Starting point is 00:32:39 more in the book that you can learn about. The next one that Stig's going to introduce is the power of the mastermind. So the whole concept of mastermind group was really something that spoke to me. I thought it was an amazing idea because this is about, you know, gathering four, five, six people that has the same values and the same goals as you. And if it helps, you can think of this as AA, I guess, like you have the same goal and you support each other. But this, if it's a master's a mom group, you can think of it like you all want to be financial independent. So you would accelerate each other's learning curves, you would challenge each other's beliefs,

Starting point is 00:33:22 and you would open up your networks to each other. So combined, you have this strong force that can help all of you to reach this common goal. Now, this doesn't mean that you need to run the same business and doesn't mean that you need to do the same things. But basically, this means that you just support each other towards this goal. And I think when we talk about persistency and we're talking about failure, I think having a mastermind group that can support you. I think that's really what separates, often separates those people who will be successful from those that will fail. So I can attest to the power of a mastermind group because a few years back, I started the Warren Buffett Forum where Stig and I hang out and we talk about just different investing ideas. and the amount of information that I have learned by participating in that forum is just, it's out of control.

Starting point is 00:34:17 I mean, it was just amazing because I would put out an idea, then other people would shoot holes through it, or they would say, hey, here's some more information that you can read. And I've just seen that firsthand in my life, how much that's increased my investing knowledge and just my overall understanding of business in general. And it's been just absolutely amazing. Now, the thing that Stig and I are going to do that we were really looking forward to with this episode is we're going to introduce to everybody our personal mastermind group. And our mastermind group consists of five people. It's myself.

Starting point is 00:34:53 It's Stig. It's Colin Yablonsky. It's Hari Ramachandra. And it's Toby Carlisle. So the five of us, and what we're going to do, which is going to be really fun, is every quarter. So every three months, we're going to actually record our mastermind group and we're going to play it for people on the podcast. That's going to be a podcast episode. So to do that, this is going to be the very first episode that we do that. And we're going to, and unfortunately, Toby wasn't able to record with us today because his wife just had a baby. So congratulations to Toby. For anybody that follows Toby on Twitter, you can go ahead and send him a message and tell him congratulations on his newborn son. but he's not going to be with us this time, but on the next recording, he'll be with us.

Starting point is 00:35:38 So just today we've got four people, and we recommend that you keep your close-knit mastermind group to about four to six people, like Stig said. So that really kind of concludes our comments for the summary of the book. Wow, that was really squeaky. But I'm going to keep that in there. That concludes our summary for the book. Like I said, we'll send out the executive summary notes. And if you don't, if you're not on our list, sign up for you.

Starting point is 00:36:03 our list right there on their top level homepage at the investors podcast.com. You can click there and sign up or any one of the episode links on the show notes. You can sign up there. And we'll send out our free executive summary of the book for you to read. Okay. So we've got the group together. We're all sitting here on Skype is how we do this, just so everyone knows. So we can all see each other. And the topic for this mastermind group discussion is going to be based on a conversation that Colin and I had on Friday. Friday, I call on a call because he was wanting to talk to me about something. So Colin, I'm going to hand it over to you and I want you to describe.

Starting point is 00:36:40 And just so you know, Stig and Hari do not know about this conversation. So they're hearing this for the first time. So go ahead, Colin. Sure. So on Friday, Prest and I talked because I got to a position where I was starting to feel really concerned that I had sold a large percentage of my portfolio. In fact, I'd sold about 90% of my portfolio. do. And as an investor, it's really tough to just sit on cash. In Canada, we have what are called

Starting point is 00:37:09 GICs and the rate of return is about 0.65%. And so as an investor, I'm having a really hard time because I've basically pulled the large percentage of my capital out of the market. And assuming that you even get a 5, 6%, if it's just going to track the earnings yield, that's a heck of a tracking air on my portfolio. So I'd love to hear what the rest do you have to say about that, what you think about that. And I'll talk about my response to him first, and then you guys can piggyback and shoot holes for that. But Stig and I have been talking about this a lot on the podcast is just, you know, if you have a very large position that had enormous capital gains, like some of Warren Buffett's positions come to mind where he had like 10 times the return of whatever

Starting point is 00:37:57 he paid, that makes no sense to sell that. Because, you know, you. he's going to get hit so hard with the capital gains. A lot of the positions that I had were not in the position where they were 10 times the price that I paid at where they were trading right now. So for me, even if you had 100% game, which would be a 2x, selling that position would maybe make sense if you expect the downturn to be around the 40 to 50% mark. So I told Colin, Colin didn't have any returns that were in excess of that amount. and I had a lot of positions that weren't in excess of that amount.

Starting point is 00:38:32 And so those positions, for me, it was very easy to sell out of those positions, turn it into cash. And then the question becomes, where do you put it as you're sitting on the cash? Do you just keep it in cash? Do you put it in some type of tip, which is an inflation-proof low-duration bond? And that's pretty much what we're recommending, or at least what I told Colin is what I'm doing personally. That doesn't mean it's the right thing. but that's what I'm doing personally. That's what Colin was doing.

Starting point is 00:39:00 And I think the thing that maybe freaked you out a little bit last week, and just so everybody knows, the time frame that we're talking right now is it's 22 March 2015. So if you're listening to this in the future, you guys can do all the Monday morning quarterbacking that you guys want to. And that's a term here in the United States for basically looking back at what happened. And, you know, it's very easy for people to shoot holes through things after they know what actually happened in the future. but you can see our thought process and how we were going through this at this point in time. So at this point in time, we don't think that it's necessarily a bad idea, or at least that's the advice that I gave Colin.

Starting point is 00:39:36 But I'm real curious to know what Stig and Hari think of that position based on where we're at in the current market cycle. Yeah, so I don't know if you guys actually knew this, but I spoke to Harry. Was it like, we go, Harry, and we're talking about what to do in the overvalued market. That was the main topic here. I'm definitely struggling with the same thing as Colin here. My current position is that I am heavily exposed in equities right now. I think I have something like 90% of my portfolio in equities.

Starting point is 00:40:09 So this is definitely something I'm thinking a lot about too. And I don't like to pay capital gains tax either, but I pay 43%. So I just envy you guys over there in the States only paying 15%. I mean, that's, that's really dream. That's a big difference just so everyone knows. Like, that's just monumental. And so Stigs over in Denmark, so he's dealing with a whole different, you know, challenge than we have here because he just gets murdered. And my voice will keep cracking.

Starting point is 00:40:38 I'm keeping all that in just so you guys know. So everyone that's listening to the show can laugh. But he's just getting killed over there with Capital Gainstack. So he's having to juggle a whole different problem than Colin, myself, and Hari here that are statesiding up in Canada. Yeah. And yeah, I gotta be honest. I think that if you listen to, Benjamin Graham, and you've reached a courage analysis,

Starting point is 00:41:00 he's saying that you shouldn't be focusing too much about the tax, because, you know, if the stock drops, then it drops, then doesn't matter anyway. But it's really something I've thought a lot about. And I remember telling myself probably like a half a year ago, or three months ago, that if I was paying less in tax, I'd probably be selling before. But what this happened now is that I actually placed a few sales orders

Starting point is 00:41:21 on some of my stocks at the moment. I'm not selling off all of it. I still have a few stocks that I think is not cheap, but reasonable priced that I'm holding on to. But for some of the stocks that have made a decent profit on, even though I'm paying 43%. I think that if you look at the current stock valuation of the overall market,

Starting point is 00:41:44 I think that you'll probably see a drop real soon. When I say real soon, I don't mean a week or a month. I don't know what will happen, perhaps a year, two years. But I think that you will see that the stock market is overvalued. And just before, I will let it how to speak. Wow, that sounded rude. I just pulled up a statistic that I would like to share with you.

Starting point is 00:42:08 So this statistic, that's called market cap to US GDP. And this is actually one of the only stock market metrics that the Rwambeuf talks about. And he spoke about this in a letter in 1999. But you're saying that this market caps U.S. GDP was probably one of the best messages to look at. And we'll link in the show notes of this letter. And so if we take a look at this where we are at the moment. And right now we are at 126%. So the higher it is, the more expensive stocks are to the old GDP in the economy.

Starting point is 00:42:44 And when you saw the peak at 2007, then it was 110%. Okay. And if you look at the bottom in March 2009, it was 57%. So I'm not saying that you can just, you know, take one of these numbers, just say that means when it reached 120, then it will drop. But it's just some of the indicators I'm also looking at when I'm seeing that, you know, it is my opinion that the stock market is overvalued. Where was it at? Stig, where was it at in 2000, just so everyone can have that as a reference? And just so you know, a thousand, or I'm sorry, 100% would mean that it's right at it's absolutely. value or at its intrinsic value, correct? I think that we actually go less. I think we'll say something between 75 to 90%. Oh, okay. Yeah, yeah.

Starting point is 00:43:28 But, yeah, I think it's a good measure. So I think it was 148% in 2000. So we still got some to go. But, you know, I think we are in this, in the area right now where things are getting very critical. So I don't know, how are you what? What's your take is? It's getting critical to protect your principle, I think is probably a good way to say.

Starting point is 00:43:53 And I think also, and I'm sorry, Harry, to jump in there, I just want to say piggyback on something that Stig was saying. My biggest fear, though, from this point forward as you start moving into that position is that we have a repeat. Like, whenever I look back at 1996, that was a point where I felt like I would have absolutely been preparing for that thing to tank. and then it went a whole other four years before it did. And do I think that that could happen this time? Yeah, I think it could, but I think the probability of that is pretty low. So that's why I'm more comfortable being in the position that I am right now. But Harri, go ahead.

Starting point is 00:44:29 Sure. Kaelan, you brought up a very interesting point. In fact, as TIG mentioned, this is something on my mind and many other investors I know. But just to comfort you, I want to read a quote from Munger, Charlie Munger, vice president of Berkshire Hathaway. He once said that it takes character to sit there with all the cash and do nothing. I didn't get to where I am

Starting point is 00:44:55 by going after mediocre opportunities. So... Yeah. Yeah, that's awesome. I love that. So you're in a good position now. So sitting actually, stick part of a very good point. There are different indicators

Starting point is 00:45:11 that people can use. use to see where we are today or where the market is today. The market cap to GDP is one good example. The other one that I use is Schiller P.E. This was introduced by Bob Schiller, the Nobel winning famous EL University Economics Professor. In fact, I will send out the link to Preston. You can add it to your show notes.

Starting point is 00:45:41 there is a website which actually tracks this. And during the difference between a normal P.E. ratio and Schiller's P. ratio is Schiller takes a 10 year worth of earnings and calculates the P. Rather than just this year's earnings, because that can have a lot of variance. And this one is more stable that way. So just to give a comparison in 2000, the Schiller's P.E. ratio was 43.7. And today it is 27.82. In 2009, it was 15.

Starting point is 00:46:16 So you can kind of, you know, make for yourself whether this market is overvalued. Where was it, hey, Hari, where was it in 08, though, before the crash? It was 24. 24, okay. Yeah. And in 2007, it was 27, exactly what it is now. And just so everyone knows the history of that, the market peaked it actually in 2007. and then from 2007, it went down, gradually went down.

Starting point is 00:46:43 It wasn't a real, you know, abrupt withdrawal, but it went down from 2007 into 2008, and then in October 2008's whenever it really had the hard crash. So if you would have got out in 2007 and you waited that whole year, you were actually beating the market by a significant margin during that year. So just in cash, you'd be beating it by a significant margin. Oh, go ahead. Yeah, I just have a quick thing.

Starting point is 00:47:05 It was a really good point, Preston. And the thing about this Schiller's PE, what I really like is that we're looking at earnings. And we're actually also kind of looking at earnings when you look at the other metric, where it was the market cap to GDP. Because you often hear that this index hit an all-time high or that index hit an all-time high. But that really doesn't tell you anything because indexes will by definition. If only we had inflation, by definition, these indexes will also always hit an all-time high. So we always need to compare that to something.

Starting point is 00:47:36 And since earnings will grow, and since the economy will grow, we will always see these all-time highs. And we'll be talking about this a century from now again. Like, now it's an awesome high. Now we're going to see a crash. We don't necessarily see a crash when it's all-time high, but we need to compare it to something. Is it sustainable? And right now it's not sustainable. So when I was talking with Colin on the phone, the one thing that I said to Colin, I said,

Starting point is 00:47:59 you know, whenever I get in these feelings where maybe, hey, I'm the outlier and I'm doing something really dumb right now, always try to look at what are the really smart people doing. So when you take that approach and you say, okay, well, what's Warren Buffett doing with his retained earnings that he's making for the last year? So we've talked about this on the podcast. He's basically everything he earned in the last year has pretty much stayed in a cash or cash equivalent position. When you look at Carl Icon, another guy that's, I think his returns, his annual returns are actually better than Buffets. But Carl Icons returns for the last year have been pretty much kept completely in cash and cash equivalence. Whenever we listen to Larry Summers, who is the former president of Harvard and economics, pretty much one of the greatest macroeconomic thinkers out there.

Starting point is 00:48:48 When we heard his thoughts during the Davos discussion, the world economic discussion, just last month, he goes, well, we're at this point here and the future looks pretty grim. You know, when you hear people like that saying things, it makes it a lot easier for me to continue to be that outlier by moving into a unpopular position that a lot of people, you know, are trying to drive the market higher. And I'm getting very worried and scared. So that was one of the things that Colin and I had discussed. So, Colin, what are your thoughts now? What do you think? Well, it's nice to have you three in my corner. That's for sure.

Starting point is 00:49:26 Yeah, I think it comes down. to more of a psychological effect that the market can have on you. And I think for a lot of first-time investors, it can be really difficult when you hear so much noise and information that's just pumped out by the media. And so every single day you'll see conflicting opinions on what's going to happen over the next, you know, call it six to 12 months. But I think ultimately, yeah, I'm of the same.

Starting point is 00:49:58 opinion. Like I said, I did sell the majority of my portfolio because I do take a more conservative approach to investing. But yeah, it's still, it's still really difficult. It's really difficult to as an investor sit on a large amount of cash knowing that your return is going to be lower. But ultimately, I think over the next couple of months, hopefully that that will turn around and become a more positive thing. Let's take a quick break and hear from today's sponsors. No, it's not your imagination, risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer.

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Starting point is 00:53:33 material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income funds prospectus at fundrise.com slash income. This is a paid advertisement. All right. Back to the show. So let's take the devil's ad. advocate approach here. And let's say that the market does really well over the next two years. And let's say that it does 15% for the rest of 2015 and then another 15% for 2016. How are you going to feel emotionally and psychologically if that would happen? If the market goes up 15% year over year. So you basically lost out on 30%. Yeah. Yeah. I don't think I'm going to feel too bad. Honestly, I'm more interested in protecting my downside than making a

Starting point is 00:54:19 return over the next two years. The warning sides are there for me. There are a lot of red flags that I'm seeing in the economy. And so that's why I'm willing to take more conservative approach. I think every now and again, you just need to rely or have a network of people that you can talk to and rely on and say, hey, here's what's going on in my own head? What are you thinking? And what are the facts that back up some of the decisions that we're making?

Starting point is 00:54:44 So I want to ask the group this question. How probable do you think that it is that a person can just, you know, ride it out until the thing really starts to drop and then you can get out right before it has the catastrophic fall off the edge. Do you guys think that that's a probable path? Do you think people can do that? No. I think, you know, just by law of large numbers, I think a few people can do that, but I think it's real, really hard. And I just want to say something to what you said before, Preston, you know, I wouldn't be surprised. I know I'm talking about they will see a crash and I'm pretty sure we'll see a crash, but I wouldn't be surprised if you'll see

Starting point is 00:55:19 a 15% gain in 2015 and a 15% gain in 2016 because this is what's happening right now. When we are building a bubble which we are right now, you know, you see lots gains until it bursts. So, you know, I would be surprised at the least if we're sitting here again in two years and talking about, yeah, when is that bubble going to burst? Because I know that, you know, even though we have recorded this, I've seen some of the previous email correspondence that had with Preston from 2013. And you know, already back then we were talking about warning. We're not talking about that we saw a bubble that was just about to burst, but we're talking about that, you know, there weren't so many great deals out there.

Starting point is 00:55:57 So, you know, things can last for years before the burst. Yeah, I think you got a good point. And I think that people just need to be prepared for that psychologically. And for the person that's worrying, they're chasing the top, I really think, and I say this analogy all the time, I say, you don't make a lot of money from the 75% mark to the 100% mark. You make all the money from the bottom when it's down at like the 25% mark back up to the 75% or 100% mark. That's where, you know, real professionals make a lot of money in the stock market. And so for me, I'm just, and I totally agree with the stigma when he decisively said, no, I don't think that you can get out right before the thing falls off the cliff. And I would agree with that.

Starting point is 00:56:39 I mean, having gone through 2008, like, yeah, it's not as simple as people think as far as just getting out and knowing what in the world's coming next. it might be 5% 10% downturn, then it comes right back. So I think that that's very hard to do. But I always err on the side of caution and trying to protect my principal. Like Colin said, Hari, would you got something? So, Mr. Nguyen, what are a very good point? Like, you make the best of your returns when, from, say, 25% to the 60% mark. The question is, how prepared are we to invest?

Starting point is 00:57:18 when things are all kind of in a gloom and doom and gloom. Like how many people invested during 2009 recession when Wells Fargo was $7 or $8 in Wells Fargo. So that's the question. That's when Buffett was investing. So we should ask ourselves, when we are selling it on the top, how prepared are we to buy at the bottom?

Starting point is 00:57:43 Yeah. See, I had no problem with that in the last one. I really found it quite fun during the last crash to be getting involved in some of the buys that were out there. It was just amazing what some of the offers were. And I think for anybody that got involved in the stock market and investing in the last couple years, you really haven't seen how much of a bloodbath it can actually become as far as the values of some of these companies. And you can buy companies at just unbelievable prices. I will tell you, looking back in hindsight during the 2008-2009 time frame, one of the best things that I think I could have maybe done was invest in an index of that industry that was really troubled or that was looking very dark and scary.

Starting point is 00:58:29 So I think investing in an individual pick for that industry, the banking industry was just disgusting in 2009 time frame. and so people that were investing in individual picks, I think they were assuming a lot of risk because it was really hard to know what was actually on these companies' balance sheets. But if I had to go back in time and do that over again, I might have invested in like a banking index during that 2009 time frame to offset my risk across the board. And then that industry was, you know, if you invest from 2009 until now, you would have had enormous gains. So I think if you would offset that risk by doing it across an index. And for this next crash, you know, who knows what the catalyst is going to be.

Starting point is 00:59:11 But if it's an industry type catalyst, I would recommend that type of approach. So, Colin, you got anything? Stig? No, everyone's quiet. I think that something that you just brought up is really interesting. And you said about the catalyst, what do you think is going to be the trigger? That was quick. No, I think it is.

Starting point is 00:59:38 I think that it's going to be something in Europe that's the trigger. That's my personal opinion. Stig, what do you think? Yeah, I agree with you. And before the show, I looked up a few numbers. So I was looking at the debt situation in Europe because that's really interesting. And, you know, I look at the U.S. and I see two months debt. But then I look in my own backyard and this is, I mean, the U.S.

Starting point is 01:00:00 with all that debt that have over there, it just looked like heaven. Because we have countries like, you know, France, Italy, Spain, the UK. know, some of the largest economies in Europe, we're missing Germany, but they have things under control. But those four big economies in Europe, they have more debt to GDP than they have the US. And then you have smaller countries like Portugal, Greece, Belgium, Netherlands, and Ireland, they have even more, but there are small economies. And for instance, what is interesting about Greece, because, you know, you might be sitting, you know, somewhere thinking Greece, is that really that important? And if you look at the numbers, Greece, that's only 3% of the GDP that we have

Starting point is 01:00:37 in the European Union. So you might be thinking that's not really that important, whether or not we have 97% volume, 100% volume. But it is really important that Greece will survive for the stability, because if Greece doesn't survive, then you'll just see a chain reaction. Then you'll see Spain, you see Italy, and you see France, and you're just pulling each other down. Then you'll see a lot of speculation also.

Starting point is 01:01:03 So it's not only about small country isolated problem. It's about that in a globalized economy, all those countries there are just interrelated. So it's really, really hard just to isolate the problem. And Preston, I see you have a comment there. Yeah, so I really think that this whole issue that we're facing right now is a currency issue, particularly the euro, I think, is really in a bad place. I'm not going to say that it's going to fail, but I wouldn't be surprised if it failed. I'm reading a book by Richard Koo, who is one of the best economists out there.

Starting point is 01:01:39 He's a Japanese gentleman that wrote – he originally wrote this book called The Holy Girl of Macroeconomics, which went through and talked about this 20-year recession that they had over in Japan and how their stock market basically lost 75 percent of its value during that 20-year period. And he recently wrote a new book called The Escape from Balance Sheet Recessions and the Quantitative Easing Trap. I'm currently about halfway through that book. And in the book, he talks about how the United States is in a very, very similar situation that Japan was in during the 1990 time frame. And what I find really interesting is he doesn't even know how to describe the Europe situation with the euro. Like, he just basically writes it off as this thing's just a mess. And I don't have any idea how they could possibly get out of this is pretty much the way he describes it in the book. and this is probably one of the best writers on the subject out there.

Starting point is 01:02:33 So I really think that the catalyst is going to be how that all gets resolved. We saw last month that they decided to kick the can down the street until the summertime for what they were going to do with Greece. And the market had a surge that day, which I just thought was hilarious because I saw it the exact opposite way. Like, okay, yeah, let's just give them more money and pile that more money on top of the more money that they already owe. and we'll just figure this out someday in the future. You know, like that's how I interpreted that solution. We can either deal with the reality that this thing is a mess right now

Starting point is 01:03:06 or we can add to that mess and then try to clean it up later. And that's what they're doing right now. So there's going to come a point where Germany's tired of footing the bill and all these other countries that are footing the bill and they're going to have to pay the piper someday. And whenever that happens, I think that's going to be your catalyst. But that's just me. I think any of those countries, though, I think Italy's got huge issues.

Starting point is 01:03:29 France has huge issues. Spain has, I mean, you look at every one of their total debt to GDPs of each of those countries, and it's a mess. So, Hari, would you have? So I just wanted to bring this point up. In his book, the Black Swan, Nasim Thalib, writes that it's usually what gets you is what nobody has seen. and this is the black swan that he talks about and not the one that everybody kind of knows already that is a problem. So I just want to put it out there that, you know, the Europe debt issue, like, you know,

Starting point is 01:04:05 is so well publicized now that most financial analysts and most of the people in the market know about it. So my main fear is what else is there that we don't know? And that might be the thing that will get us, like the housing bubble. very few had seen it before it came. How did you like that book? Because I've been meaning to read that book. I know that's one of Jeff Bezos's favorite books, but I haven't read it.

Starting point is 01:04:31 I have probably read it like three times now. So it's good. All right. All right. I need to put it on there. Stig, we'll do an episode on that. Sure.

Starting point is 01:04:40 Yeah. You know, we have so many problems in Europe. And definitely one of the big problems that is our growth. So last quarter we grew 0.3%. So that's not impressive. And especially if you compare it to the U.S. What is the president like?

Starting point is 01:04:54 Three, four percent, something like that? The GDP growth in the U.S.? No, I think it's 2%. Really? Wow. Yeah, so it's really horrible here. And so what we see here is that we're talking a lot about quantitative easing. So we're basically printing money.

Starting point is 01:05:11 And basically, the last thing I heard was that we just increased our projections for 2015 from 1.3 to 1.5 now. and apparently some politicians are happy about that. And, you know, what I was trick for that, printing my money. I mean, that's really not a sustainable situation. You know, it was just completely, you know, dilute the currency, and we have a ton of problems with that, too.

Starting point is 01:05:35 But, you know, we are not fixing the problem here. We're just, you know, putting out fires. And, yeah, that's... That's Ray Dalio. And you guys all know this, because you've all read the Ray Dalio stuff that we've been talking about, bit. That's Ray Dalio's big thing, is that the interest rate has to be below the GDP growth rate.

Starting point is 01:05:53 And when it's not, that's when you run into some major issues. So that's why, and this is something that my anticipation as we go through the next 10 years is that interest rates are going to continue to be this low. I don't think that they're going to be going up anytime soon. I know whenever you look at interest rates during the Great Depression time frame, like they remained at near zero clear into, I want to say, the mid 40s and 50s. And even then it was like at 3% at the highest. So what do you guys think? what like if you think of probabilistic outcomes

Starting point is 01:06:22 of what is happening in Europe and in general economics in the world what are the probabilities is it inflation going out of control or is it euro breaking up causing massive disruptions

Starting point is 01:06:38 in the global economy what are your thoughts on that yes you know Here's my opinion. I'll give it real fast because I want everyone else to talk. I think that Ray Dalio is right in saying that the only lever we have at this point to fix this is with currency. But the issue you run in with currency is if you inflate it to the levels that you need to actually have an impact and to stimulate the economy, you have to do it at a very large scale. So when we look at the amount of quantitative easing we did during this last crash, it was an enormous amount of money.

Starting point is 01:07:15 It was one third of our total GDP for the year. Okay, that's enormous. And we were able to do that because we changed the reserve ratio of the amount of credit to offset that. But the problem with this next crash is you don't have that luxury to offset it like you did on the last one with taking more credit out of the system. So that leaves you with a very small currency lever that you can play with. Let's call it 10%. Okay. So do I think that inflating the currency by 10% over like a five-year period is going to have enough stimulus to get the GDP going again?

Starting point is 01:07:55 I don't. Do I think that the government's going to inflate it more than 10% at a pop? I don't think so. So that means my anticipation, like I said, this is all so hypothetical. My anticipation is that this is going to be a long drawn-out recession that occurs. I think it's going to be a real slow, gradual. I think it's going to be longer than the ones that you've seen in the past, like the one in 2009. Nine months later, it was already on its up trend coming back up again.

Starting point is 01:08:23 I don't anticipate that with this one. I think that it's going to last longer than a couple years, to be quite honest with you. And I think that it's going to be that anomaly that most people haven't seen in their lifetime. And I think that that's going to be a huge upset. So my concern as we go through this, whenever it occurs, whether it's a year, three years, whatever, whenever it does happen, I'm going to be real slow to enter back into the market because I anticipate it to be a real slow, slow drawn out recession period that it takes to hit the bottom. Yeah. You know, I'm, I could say that I would probably let, you know, Colin speak because I really don't know about that.

Starting point is 01:09:00 But, you know, I always like to guess. So, you know, this is, this is my guess. I think the first thing to really pay attention to is that we are at the end of a, long run dead cycle. So we have these short cycles. And we talked about this in our master's group before we started recording. So I'm completely sure that you are complete following me on this. But you see these short-term cycles.

Starting point is 01:09:27 And these are typically, you know, between five to eight years. On average, there are seven years. So let's first talk about that. If we go back, seven years, where were we? 2008. And then seven years before, 2000 or 2000. So I mean, I'm definitely not going to say that you can just, you know, go seven years ahead and then you'll see a crash. I mean, that's not how it works.

Starting point is 01:09:50 But we definitely always have some ups and downs. And I think it's about time that if we look at the numbers, we'll probably see the end of a short run, short term cycle. And then if you look at, you know, the more macroeconomic factors, then you'll see that we are, you know, on the end of a long-term debt cycle. especially as we discussed earlier also in the podcast because you see this very, very low interest rates. So what I think is going to be extremely interesting since we can't, you know, put stimulus into the economy by low in the interest rate this time as we could in the last time,

Starting point is 01:10:24 is what will happen. And what I think will happen. And this is really my answer. But what I think is happened is that we will see this long drought that Preston was talking about. And we will see asset prices just all over. simply because people can't figure out what things are worth. And for those of you, I can remember what happened in 2008,

Starting point is 01:10:45 we also saw some of this happening. So for instance, in the banking sector we're talking about before, it was impossible, at least for me, but it was impossible to see for most people the balance sheets of these banks. It was completely transparent, you know, where all the bad debt was. And because we don't have really an option to regulate the economy as we actually did have the last time. And what I think is even more problematic today is

Starting point is 01:11:12 I have a hard time figuring out where the growth should come from. I think you can see back then in the last crisis that you have a lot of economies in Asia that were really doing a lot of good things and really pulling the world that coming ahead. But I can't see that now. The only thing I can look at right now that looks reasonable stable to me,

Starting point is 01:11:33 that's the US. And to be quite honest, it's not a pretty sight. It's just because it looks worse where I'm sitting right now. You know we're in a great position when the U.S. is the best-looking option. Yeah, it's super interesting because if you watch the Ray Dalio video, when he gets to the point where he's talking about the long-term debt cycle, and he's got this illustration of this lever. He's talking about interest rates.

Starting point is 01:11:59 Now, once you get to the bottom, you can't pull that lever down any further to stimulate, the economy. And I think that that's the position that we're very quickly approaching. You know, austerity measures in terms of reducing your debt, who wants to save money, the redistribution of wealth that can have an impact, but not one that's going to solve the problem. Defaults is something that I can certainly see becoming more frequent and then printing money. So when you print more money, though, you're going to inflate the currency, which I think is is highly likely and is something that's going to most probably happen. Well, hey, guys, let's wrap it up there.

Starting point is 01:12:37 I'm sure everyone's tired of listening to us, YAC, here. But that was really fun. I'm glad that we recorded that so we can document our positions. And I'm sure, you know, in five years, we're going to play this back and listen to this and really laugh at some of our opinions. So, but it's good, though. You have to go through those discussions, those mental gymnastics to try to make sure that you can understand it better.

Starting point is 01:12:59 and to be honest with you guys, I really don't like when we agree on things. I feel like I get a whole lot more out of whenever we don't agree on things, especially on the forum. And for anybody that's on our form, I guess I'm looking for somebody to shoot holes through some of my opinions and some of the things that I put out there. I'm not looking for people to agree with me. I want them to tell me why I'm wrong. And that's one of the beauties of these mastermind groups that I've discovered through the years is that if you're open to suggestion, which you should be because that's how you can increase your knowledge. These things can be enormously beneficial because you can get all the different vantage points.

Starting point is 01:13:36 And whenever you see things from different vantage points, that's where the truth lies. So it was a great discussion. I think that everyone will get the utility out of a mastermind group. And that's why we're doing this is to demonstrate to people the importance. But think of who those people are in your life that you can surround yourself with that have these unique skills. can help you develop this mastermind to help you achieve what it is that your goal is. And that's what we were talking about in the first part of our episode. And so when you look at our mastermind group, so Stig and I, our expertise is in finance.

Starting point is 01:14:13 Although Colin and Hari can definitely jive on the finance piece, their expertise are in different areas. So Colin, he's an expert at marketing. He's an expert at search engine optimization online. Hari's an expert at programming and executive leadership. If you look at Toby, he's another guy who's an expert at investing, but he's also an expert at law. And so each person in our mastermind has a unique skill set and they bring a different vantage point. And that's what you really want to find in the mastermind that you assemble and that you orchestrate. You don't want everybody to be an expert in the same exact thing.

Starting point is 01:14:50 So that has a very unique benefit as you move forward. and as you discuss your topics. Another key point that I want to highlight for the mastermind is that you can't bring people in that have an interest in getting something from the other person. When you look at our mastermind group, we truly are just exchanging ideas. Like some people might think that I pay Hari for this and then Hari pays me for that, but it's not like that at all. Our relationship is purely a friendship type relationship where we sit down and we talk on

Starting point is 01:15:23 email, we call each other. We just, it's, it's almost like hanging out with friends, even though we're in all different locations like Hari's up in San Francisco. Toby's down in the LA area. Collins up in Canada. Stigs over in Denmark. And how many of us have met in person for, just three of us have actually met in person, which is amazing. It just shows you the power of the internet bit. So when you're assembling your mastermind, it doesn't have to be people in your town.

Starting point is 01:15:48 It can be people that you've met online. It can be just an expert in whatever field that you're trying to understand. damn better. But that's all we got for you guys for this week. We're not going to play a question. We'll play a question from the audience next week, but we really appreciate what everyone's doing. And if you have some thoughts or you have some ideas about this mastermind group or the book Think and Grow Rich, be sure to send it off to Stig of myself or come on to our forum and talk to us there. We've got plenty of ideas and different topics there that everyone can talk about. So really great having you with us. And we'll see you guys next week.

Starting point is 01:16:21 Thanks for listening to The Investors Podcast. To listen to more shows or access to the tools discussed on the show, be sure to visit www. www.com. Submit your questions or request a guest appearance to The Investors Podcast by going to www.org. AsktheInvesters.com. If your question is answered during the show,

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