Ed LeMasters On Managing Your Money During Challenging Times (#5)

Steve Wells: [00:00:00] This is Steve Wells. 

Jeffrey Feldberg: [00:00:01] And I'm Jeffrey Feldberg. Welcome to the Sell My Business Podcast. 

Steve Wells: [00:00:06] This podcast is brought to you by Deep Wealth. Are you a business owner who is wondering how to either grow your business, sell it, or both? Or maybe in today's environment, you're wondering how to make your business pandemic proof.

Visit deepwealth.com to find out how you can master the strategies to grow and extract the deep wealth from your business. Visit www.deepwealth.com. 

Jeffrey Feldberg: [00:00:29] It's terrific to have ed Le masters with us. Ed's been in the financial services industry for over 35 years and is a wealth advisor and portfolio manager.

Ed has extensive training in estate planning and wealth management, Ed's team, and manages a diversified base of clients that varies from wealthy families to institutions, foundations, private schools, associations, and corporations. 

Steve Wells: [00:00:56] You know, Jeffrey, I think Ed must be a very important person. We have, a disclaimer to read from his legal department since Ed's not allowed to mention his firm.

So here it goes, this interview is for the express purpose of discussing general business principles and is not meant to convey investment advice, promote any firm product, service or individual. All information opinions expressed are just that and pertain to the current environment. And are subject to change.

Well Ed welcome and thank you so much for being with us today. I know that you are an expert in helping businesses before they exit to prepare for the infusion of cash that they're going to get. And then after they exit, you know what to do with that. We're going to reserve that topic for another time because right now we want to address the financial issues that we're having with this pandemic crisis. And, I know you have a lot of insight that you could give our listeners, but why don't you give us a brief overview of what you have been doing and do and in what type of clients that you're seeing. 

Ed LeMasters: [00:02:03] Sure. I've been in the investment business for 37 years for one of the largest banks in the world.

55% of my clients have retired. Of those about half are business owners that have exited their business. And the remaining 45%, about half of those, are currently running a business. So they're, they're living through this pandemic as we speak. And then the other half of that 45% are professionals, cardiologists, surgeons, doctors’ groups, and some large associations.

So, I really have, have dealt with, Business owners for 37 years and have walked, 30 year olds who are now in their sixties all the way through the investing life cycle, all the way to fruition and exit. Well. Great. 

Steve Wells: [00:02:55] With the clients that you see, Ed, what do you, what are you noticing? I mean, you've got a wide variety of businesses and professionals.

I mean, what are you seeing, in their lives and businesses that are being affected and, you know, how are they surviving or trying to survive during this time? 

Ed LeMasters: [00:03:14] That's a great question. I think it is survival mode, dealing with one of the most unusual unknowns that we've ever run into. We don't know when it's going to end.

We know when the government's going to reopen. So everybody is literally, staying glued to the data to see, how quickly they can come out seeing clients access lines of credit. Obviously get their payroll together and apply for this PPP and take advantage of the government programs that are out there.

I would say the biggest thing in a deeper conversation in a deeper context. When your business gets stressed, everything becomes clear. when business is great, a lot of, weaknesses in your business, easy to look over and be hidden, but this kind of lays bare, anything that you need to change in your business on a go forward basis.

Do you have too many people? How are people adapting to working at home were, were you prepared, in any way, shape, or form for a 50% drop in revenues, 30% drop in revenues? How quickly can your organization adapt when something from left field comes out. On a deeper level, business people are really examining their business from top to bottom so that they know and they can identify what needs to be changed on the other side. 

Jeffrey Feldberg: [00:04:39] Ed I really like what you said just now that when your business becomes stressed, that's when everything becomes clear. And there's a lot of wisdom in that. But let me ask you this.

I think most people would agree that the pandemic caught everyone off guard. 

But suppose we somehow could go back in time and it's two years ago. And two years ago, we said, in two years from now, there's going to be a pandemic that's going to hit the entire world like we've never seen before.  What advice would you be saying two years ago to a business owner, both on the business side and on the, the personal side to prepare yourself on the financial sense for a pandemic like situation that we're currently going through? What, what strategies could be done?

Ed LeMasters: [00:05:30] Yeah, that's a great question. Let me use contractors, builders as an example, because we deal with many large general contractors, subcontractors, a hundred million-dollar companies in the construction business and as a continuum, you've got the contractor who says, my business is cyclical.

There really is no repeat business. I've got to go out and find new projects and rebid things every year. So, I want to have a portfolio that's not tied to the economic cycle, and that might be bonds or something conservative.  There's the other side who says, there's so much money being made in construction. I'm dealing with, people in real estate and I'm going to take my excess earnings and I'm going to become an apartment complex owner. They take their expertise and they decide to become a developer or user contracting skills to build a business.

When 08 happened, which is the last time I really saw the, you know, a big crisis like this business went down for these contractors. You know, a hundred million-dollar companies went to $80 $50 $20 million in a matter of two years. Business and construction stopped. So in that case, you know that builder who had a portfolio, of a bond, stocks, whatever, survived.

In our market some of the biggest contractors went under in 08, or 09. So I think, I think, you know, that we don't know what the next pandemic war, a disease or business climate. Change will look like. So I think having that, having that a portfolio that's not tied your business is really important, especially if you're in a cyclical business like construction or if you're in a business like technology, which you know can, rapidly change over a four or five year period.

Steve Wells: [00:07:35] So I guess if I'm hearing you correctly, just as if you're developing a stock portfolio, you want diversification and you want, you, you want things that, that aren't 

Ed LeMasters: [00:07:45] as related. 

Steve Wells: [00:07:46] So you can do that in a, in a business. What about reserves? We've talked to some nonprofits who because of their board of directors and maybe their bylaws said they could not have reserve now they wished they had reserved. Have you seen anything, you know, in personal or business life? 

Ed LeMasters: [00:08:04] On the business side, one of the things we run into with an entrepreneur is, I don't need anything else.

My business is my stock. I'm going to build this company and at some point exit, and then I'll have this pot of goal and why should I invest in tax free bonds or equities when I can produce widgets and I've got a 20%, you know, pretax profit margin and you're wanting me to  take money out of that 20% operating profit margin and putting it into bonds or stocks that yield, 5 or 10%. If I can convince them that, you need to have something that's not tied to your business, not tied to the economic cycle, is not going to go up or down when your revenues go up or down and convince them to diversify that's really a survival tactic. And.  we can see it, we can see it in, in the public markets and the private markets where companies that don't build up that reserve, and I don't have a, a percentage number that you should have, but a number that, that certainly can support you for 90 to 120 days with zero revenue would be, would be a reserve.

But I think after this panic, a lot of, a lot of business people will be shooting for and they didn't feel like they needed that, you know, to Jeffrey's previous question, you know, 60 days ago 

Jeffrey Feldberg: [00:09:32] Ed you bring up some, some interesting points. So I know at Deep Wealth when we speak to business owners who are contemplating either to grow their business or to sell their business, or both.

One of the common things that we hear is, you know I don't need any help. I don't want to pay any, any commissions. I don't need an investment banker. I don't even need a broker. I'll, I'll just do it on my own. And I also hear the same thing, the same kind of thinking, from business owners. While, you know what, I don't really play the markets, but if I did or if I do play the markets, I will, I'll just do it online.

I why pay the commission. I can do it myself. I'm pretty smart guy. I look at the business that I built and the three of us all know that that is just a, a path that puts you on danger, that has a destination called destruction. What would you say to our listeners who have that kind of thinking of why a professional like yourself should be involved with the business owner as early as possible to do what you do?

Ed LeMasters: [00:10:38] That's a great question. Entrepreneurs and business owners can be your best clients and it can be also your most challenging with their self-confidence, Type A, driven, goal oriented. and in, in some cases, very much in control of their life, their destiny, their, their businesses. So, it's very hard for some people to give up that control. So I would say to them. You   have a CPA, you have a CFO, you have tax experts, you have attorneys and, and you want to be involved in all those areas of your business, but you don't want to drop the legal contract and you use a professional.

We're that objective person that can really guide them into a, a pretty complex world of not only investments, but currencies, hedge funds, bonds, interest rates, and places that they're not an expert. So, I try to tell them that you're an expert at widgets. We're an expert at the market. Let's work together.

And over time you will, you will become more and more educated on the business. I also encourage clients if they, if they want to have their play account at each trade or a or a discount broker, go ahead and do it yourself and let's come back and in two years and compare. You know, our results of what we built as a portfolio together versus your stock picking hobby and I've never lost that bet. I might, I might lose that bet in the future, but I haven't lost that bet. So I would say, you're used to employing experts, employ us and give us an opportunity to show you, a different set of examples.  

Steve Wells: [00:12:23] Even if it's not an entrepreneur, maybe even you're in the medical profession. I mean, you're, you're a surgeon who knows what you're doing. Something you find psychologically the idea of having really a passive investment, one that you're not controlling that now you are controlling for them.

Is that a tough thing for some people to get their head around? 

Ed LeMasters: [00:12:42] Absolutely. In light of the pandemic,  with the market that's actually acting very emotionally the last couple of months and, and, and some days has gone up on, bad news and, and gone down on good news, it makes, it makes those same clients feel like it's completely out of their control.

As Warren Buffett says in the short term, the market is an emotional barometer. In the long term, it's a calculator. If you can get people to get out of the day to day emotions of what's going on today and look out two years, they feel more comfortable. It's really important to get them into a long-term plan, focus on a year or two, three years down the road, show them historical returns that the market always seems to always come back.

To think more about investments in a long-term, like they liked a plan for their business three and five years out. 

Jeffrey Feldberg: [00:13:42] Ed I'm wondering if we put yourself in the place of many people out there who, if they've invested in the market, they've seen a very large.

A reduction in, in what the value of the portfolio is compared to what it was just a very short while back. And so let's assume that they haven't panicked and they didn't do anything just yet. And unfortunately for a lot of people that that may not be the case, but if you're someone who watched your portfolio go down 10 2030 40% maybe, maybe more, and you're wondering what to do.

Right now, when you know things, things can change, but right now, and really in any pandemic, what's your advice to business owners on the personal side, but also on the business side of what do you do on paper when you're underwater in a big way. 

Ed LeMasters: [00:14:37] It's obviously much easier to react and make some changes in the public market.

You can't, can't really do that with your business overnight, but in a panic situation like we saw in March, you know, where emotions rule, we tell people, panic is not an investment strategy, you need to really calm down.  It's very tough because people start, they may not watch their account every month when it's going up, but when it's going down, they tend to, they tend to log on and start checking it, you know, day to day.

So I would say to them, we didn't buy these things to make money in June or July this year. We bought them to build wealth over time. And, I like to use, the time correction. So let me put that in perspective. In 2008, the market pulled back 50% and we went back 12 years in time.

So in 08 at the bottom, the market went back to where it was in 1996. That's a serious correction. That's, that's a real damage to your permanent wealth. That's going to take a couple of two, three, four years to come to come back. This correction just to put it in perspective. Has basically, last year was a great year in the market.

This year has been tough and you've given back. A 60 40 account is back to where it was about last January. So, you, you've, you've stepped back in time about 15 months. Versus 12 years in 2008, so project out two years, this pandemic will be over. We may have a backseat. but you look two years out and you would say to a client, this, this market is going to be much higher than it is today.

May not be back at, say, 30,000 on the Dow, but we'll be out of this pandemic. And, the market and the business environment will be, recovering, so you can rest assured it'll be higher two years out and you'll get every war. Pandemic world war II, I did the seven flow that caused a 30% correction in the market.

You'd go out two years in and you were, you know, you were very profitable. 

Steve Wells: [00:16:53] So, I, you know, I know there are people who might look for opportunities. Do you think there will be opportunities for, for, for people? And what, what can they do? How 

Ed LeMasters: [00:17:02] can they see those are, you know, you'd help them 

Steve Wells: [00:17:04] see them, but 

Ed LeMasters: [00:17:07] they're already are.

And it's, it's interesting that, that, Doctors who, who have a low beta, right? They, they, they have a pretty steady job. Doctors are never unemployed. They don't get fired. They’re, interested right now and they're asking questions about, should I buy X? Should I buy Y? It's the business owner.

This just furloughed 50 people, applied for a government program, hasn't gotten their check yet and is hemorrhaging, you know, 20 or 50 or a hundred thousand dollars a week in payroll that is not ready to buy stocks. And, and in, intuitively he may know there's opportunities out there, but the business climate is just so bad.

I also think that there's a huge difference between the right now between the doctor and the professional, just as far as their, their outlook on the world. And we have to remember that, we are all biased. So whatever you're going through in your personal life, with your family, with your business colors your view of the market, the economy.

And I have to, I have to constantly remind clients have that. Because they're really two different things, but you do bring your biases to the table. And I would say business people just today are very nervous, and are probably more pessimistic about the length of this pandemic and how long it's going to take their business to recover.

Jeffrey Feldberg: [00:18:37] Ed I'm going to ask a loaded question and the reality, no one really knows. And hindsight's always 20/20. 

Ed LeMasters: [00:18:45] Sure. 

Jeffrey Feldberg: [00:18:46] Looking back now, whether it was the Corona virus or something else, were there telltale signs that heading into, call it February, March, that you just knew something wasn't right and, and you didn't know when, but it was just a matter of it's going to happen.

Ed LeMasters: [00:19:09] Yeah. So, whatever the market trades above 18 times current year number, it happens a lot. I mean, about 30% of the time, the market's up around 17 or 18. What that tells you is the market's priced to perfection. It's priced in lower rates. It's priced in, the president at the time.

It's priced in geopolitical peace. It's priced in a, in this case this year. Earnings growth of seven, eight, 9% on the S&P 500 and so you get this bubble. That inflated level, anything that goes wrong that, that, that. The breaks, those that those hypotheses are, those things that are baked into the cake will typically lead to a 10 or 15% correction, and that's when you get these, these violent corrections.

This one was 30%. Because to your point, it came out of left field. It happened in a period of, I mean, we kind of discovered that this was, that this was going to spread across the country in a very short period of time and led to one of the quickest record highs to a 20% correction in eight trading days.

That was unprecedented. So the speed at which this happened. was really something I would say to the business owner. you know, and, and again, this isn't about exit, but, the timing of, of when you sell your business is really, really important. I mean, clearly if somebody was going to exit their business, the time to do it was last year when private equity, we were making cold calls and, and valuations were at the all-time high.

A business that didn't exit last October, may not see that valuation until this whole thing is over. It may take them two years to get there. So, I just wanted to include that because I know some of your listeners are, are, are looking down the road and, I think you have to look a good economy and a good stock market for what it is and, and, you know, factor that into your decision on when and where you access it.

Steve Wells: [00:21:21] You know, you bring up a point that we talk about a Deep Wealth all the time, is that you want to grow your business and maybe you want to exit the business, but they are compatible and with, with having a business that's ready. And so a lot of the things that we advise people to do is preparing themselves so that when opportunity comes they can take advantage of it.

Because a lot of the stuff takes time. It takes time to get your management team, it takes time to readjust your business model. Do you have a balanced portfolio where you're going to balance, you know, how much equity, how much bonds, everything else. And, and the reason for that is, is for the strategy that you've allocated. So when you see a hot economy and you rebalance and you give yourself some leeway, I think you probably did that.

You probably put cash, took some equity off the table, to make sure their inbounds, but also maybe a little bit more when you saw the economy being pretty hot. 

Ed LeMasters: [00:22:19] I'm going to touch on it and just to address kind of the mindset of the business owner. So, You, you know, thinking of people, a dozen clients that I've had his clients since the eighties and nineties and, and watch their kids grow up and watch them build their business and then walk through the sale of their business and then they got this, this pot of gold at the end of the tunnel.

The mindset of somebody that has a business and then maybe has a half a million or $1 million in non-business savings. Deferred comp plan, is very different than when they exit and they have the most money they're probably ever going to have at one time be it 10 million, 20 million, 50 million, 100 million.

The mindset becomes, I've made my money, I've built my empire. Just, I don't want to lose this. So we find that that person, who might have been a risk taker, might've been a serial entrepreneur or might've, might have, you know, exited by building, sold multiple businesses, says, you know what? At this point, I want to give back.

I want to take care of my family and those portfolios; we see these portfolios typically. 15%, 20%, 30%, 35% in equities, and the remainder of their portfolio and non-correlated barely safe stuff whether it'd be hedge funds or whether it be tax free municipal bonds. So, I can say with a high degree to competence in the last 90 days when the market was down 30 that type of client might've been down 10% or 11% in a down market. And so that's, that's where we really bring expertise to the table. and can help them build, quote that Bulletproof portfolio because at 10 or 20 or 30 or 50 million, you're not typically trying to triple that again. you just don't want to go back at age 60 or 70 and have to do it all over again and suffer a loss of, of 20, 30, 40, 50%.

So, I hope that answered your question, but, there's a real mindset upon an exit that we see a change in the, in the risk tolerance that usually is correlates with age too. Somebody exiting it at 40 may have a different attitude, may want to double it again, but somebody exiting it, 55 or 65 just doesn't need to hassle. 

Jeffrey Feldberg: [00:24:48] Okay. Ed, let me pick up on, on, on what you were saying with mindset and I, if I'm looking for a financial advisor. And it doesn't matter if I've sold my company or if I'm rowing my company. I imagine that there are certain attributes that are going to stand out and are going to be the order winners of what I want for someone who's going to represent my interest and my hard-earned money.

Because today information is free and is easily accessible. Okay. I would imagine though that the saying you get what you pay for applies here. So for our community who find themselves in a situation that they don't like and would like to change that and are now out there wondering or thinking about who could I look to.

To take my money and invested in and get some decent returns regardless of what's going on and to protect it. What would be the attributes of a person like yourself of a financial advisor, a wealth manager. 

Ed LeMasters: [00:25:56] Great question. I think number one is you have to find somebody that you're going to like and trust because it's going to be one of your closest relationships.

Maybe not day one or two or three, but over a five, 10, 20-year period, it, that person is going to be one of the closest relationships you have in your life, so you have to like them and respect them. I would also say, you want somebody that's not so rigid. That they, that they come across as, that they know everything there is to know.

Cause this is a business where you have to constantly be learning, constantly be adapting to changing situations. The last 90 days a perfect. example. and so, again, I think you have to, you have to find somebody that's on the, you're on the same page with, has your best interest in mind that you, that you feel like you like and trust.

And then, you know, this thing you would look for if you were hiring somebody, would come into play hard work. dedication, going the extra mile, the same thing as you would want an a star employee you would look for in it and an advisor. And when, somebody goes to exit, and a lot of times we're talking to business owners that aren't clients knowing that they may exit in the next three or four years and positioning ourselves as, as wanting to be there.

We encourage them to go, go interview two or three other people. We think we think we will shine if you go look at the competition. So, I mean, we've thrown that out there at our, at the events that we do for business owners’ interview three or four, we feel like we will win more than we lose if you do that.

Steve Wells: [00:27:37] Money is, It's such an important part of everybody's life. And so when you are involved in that, you are intimate with those businesses and those families. So, you know, I, I hear what you're saying because you're, you're going to be there at every wedding, baby, college fund to funeral too. I mean, all, all those things are impacted by money. 

Ed LeMasters: [00:28:00] It's even deeper than that. Two, best friends from high school who have known each other for 40 years. They may have never talked about finances ever. Shared like where you know, they spend too much, or I, I'm, I'm, I'm really thinking about what I should do.

What's my legacy? They don't have that deep conversations, especially men. So, if someone has that conversation with their financial advisor and their financial advisor truly knows their whole financial situation and has done a plan, there's a level of intimacy there that he may have with his advisor.

That is his three best social friends have no clue about, what's, what's really going on in his financial world. So it, it tends to bring that intimacy to the relationship. And, and, a lot of times the first guy, that a client calls when there's problems in a marriage or problems with the, with the child.

So, I think that just comes with the, with the territory. 

Jeffrey Feldberg: [00:29:03] Ed. I often hear when it comes to financial advisors, I hear the term past results don't predict. And so when, when you hear that, and if I were to speak to different advisors, I would imagine most advisors, of course, they're going to say, hey Jeffrey, I work really hard for you and I have experience and I've been in the industry and I'll work with you.

I'm flexible. Many of the attributes that you had shared of what to look for. So what's the BS test out there? Is there, in your experience, how do you really know that you get beyond the, the, the talk and the sales talk and the marketing talk? Are there any one, two or three telltale signs that this is a wealth manager or financial advisor that's worth considering?

Ed LeMasters: [00:29:56] That's great question. yes. So, so one of the key questions I would want to ask is, how much money do you personally manage? Not your five-person team, but do you personally manage and how many, how many, families is that the average financial advisor in America has about 350 to 400 clients.

Which means they literally are spending all their time with 20 or 30 families and the rest are getting ignored. So, you want somebody that has a lot of assets, but not a lot of relationships. 20 families, 30 families, 40 families. The other thing is I, and I, we say this at our, at our events, we deal with business owners, we deal with business owners have sold.

We've walk clients through that life cycle and we'd love to have you. We will introduce you to some of our existing clients. If you are serious and you, you were, you know, really want to get down and dirty and interview us. I think that's that if you're dealing with somebody that's going to sell their business and they're going to solve for a substantial amount of money, asking their advisor to say, let me, yeah, I love to meet a couple of your clients that you've, that are similar to me that have, that have walked this path, exited their business any, any good advisers should be able to put up a, one of his favorite clients in front of you and let you tell them what the relationship's been like.  

Steve Wells: [00:31:29] Ed as we start to wrap this up, Ed, and I don't, I, you can't really predict anything.

I know it's changing day to day, but have you, have you been reading anything or seeing anything about, how you think this might affect consumer behavior? I mean, what, what are some of the, you know, the big minds say about this? 

Ed LeMasters: [00:31:49] Absolutely. So, early on and it could still be wrong.

I've seen pieces from, from Goldman, UBS, JP Morgan, a lot of big firms writing about what will happen and knowing the pain that I was hearing from clients and friends and social contacts, I didn't buy into the V I still don't buy into the V like correction. Like we're going to be back to normal in August and everything's going to be great.

Now. Unemployment is going to be 3.8%. There's kind of the U-shaped recovery where it's going to have a bottoming process and then kind of grind out of this, hopefully in six, eight, nine, 10 months by first quarter and makes years. What I've been telling clients, and then there's the L shape recovery where we go down and we stay down for a long time.

That's almost like. Heavy, terrible depression recession that lasts for a couple of years. So, you know, looking at the U shape, recovery, it's going to be very much a stock pickers market. And what do I mean by that means the S&P 500 is not going to go back to 3,400 from today's 2,700. There's going to be winners, huge losers and it's time to really figure out, you know, where you want to be invested, or if you're picking managers, where that manager's going to be invested. Because I just don't see the hotel and airline business coming out of this right away. And yet, yesterday, as we, as we were preparing for this, you know, Amazon hit its all-time high.

So tech stocks that have secular growth of 20% low debt and employee workforce, it can work from home, high cashflow, high barriers to entry. Those companies, be it Netflix or Amazon are doing well where, you know, Hilton might go out of business. JC penny went out of business this week.

Retail was in bad shape before this happened, and, it's probably going to get worse. So yeah, it's a time where. You can't just sit back on your investments or your business, it's really time to dig in. What I'm hearing from a lot of business owner clients is they've laid some people off and they figured out that they can operate with less people and, and they're not going to probably snap back and just hire those same people back.

They realize that. Who they need and who they're going to keep? And they realized there was probably some, some fluff in there and dad would, and they're getting rid of it. 

Jeffrey Feldberg: [00:34:22] Ed I'm wondering as we start to, close things out here, is a mindset of managing your wealth during a pandemic when it comes to investing is, is it any different than, than regular times or. Or not. So in other words, I, yes, it's crazy out there. And perhaps you're looking at different opportunities or, or not, but from a strategic side, from a mindset side, does it really make a difference from all the years that, that you've been doing this?

Ed LeMasters: [00:34:56] Yeah, the best investors. And I hope that every client we have over a four or five, 10-year period becomes a better investor. Learns that you got to control your emotions. And, Steve made a point earlier. Rebalancing is important. So you have 30% in equities. Last year, the equities went way up at the beginning of the year, that 30% now 35% and as a matter of practice, you take profits, pull that 35% and inequities back the 30 and, and so you take risks off the table in January.

Even though things were very, looks very bright. Similarly. If you had 30% inequities 90 days ago, and that 30% now is down the 25% having the discipline to then add money to your equity portfolio to bring it back to your target up 30% is really important. So, I think you have to, you know, use the old rule when everybody is giddy and buying you got to trim and pull a bit off the table.

And when everybody is panicking and there's blood in the streets and nobody wants to buy, you have to have the intestinal fortitude, to go against the crowd. And by and that, that, that will probably never change 

Jeffrey Feldberg: [00:36:17] at one of the questions that we like to ask. As we begin to wrap things up, here it is with your nearly four decades of experience and knowing what you know, if you could do only one thing, what would that be on the investment side?

Ed LeMasters: [00:36:36] I would say stick with high quality and that means, manager picking a manager or a fund or at that means building a portfolio around stocks. I mean, quality always wins out.

When you read the news today, you're not hearing, you know, tales of death, on companies like Proctor and gamble and Johnson and Johnson or Costco. You're hearing, that the Hilton than Macys companies that, we're, we're, we're having problems way before this, so quality matters.

A lot of people have gotten burned in high yield bonds and again, quality. If something is yielding 13% and treasuries are yielding less than one, you've got to say there's something wrong. Biting into junk bonds or high yield debt or something that sounds too good to be true, if you stay that, if you do that long enough, you're going to get burned. So, I think quality rules and our game and always will. 

Steve Wells: [00:37:39] Yeah. I guess it's greed, isn't it? It's kind of a human nature. You look at something and say, wow, it'd be great if I could make that. But you know, there's a reason that comes with a lot of risks. 

Ed LeMasters: [00:37:50] I would just say sticking with a thesis, even when the facts that changes, it hurts business people. It hurts in the market. So, quick story. Got a, client that cleans, university cleans office buildings. Downtown has the number one window cleaning company. He, he, he's looking at it 370 employees and he's saying, our world has changed forever.

Because first of all, companies in these downtown office buildings are figuring out that 30% of their people can work from home. So, they're going to cut back on office space and then, they want, literally want, like every surface wipe down every day. 

So, he's looking at it and say, what do I have to do to adapt, to comply with the need to sterilize basically their workplace every night.

Also knowing that a lot of these big companies are going to cut back on their square foot office space, which is how they pay us by 20 or 30% in next few years. So, he's adapting now before the change takes place. And, you know, that's an example of what every business person's gotta be doing right now.

Steve Wells: [00:39:03] Well, as we wrap it up, any final words of advice you have for our listeners?

Ed LeMasters: [00:39:07] You should have a plan. That plan should have been in place last few years. It should have numbers of where you ought to be in three, four, five, six years down the road. And, and this is the time to pull out that plan that you did in 2016 or 18 dust it off and you're probably going to see that you're right about where you thought you would be.

Even at today's number back in 14 or 15, because the market to Jeffery's earlier point went up probably farther than it should of last year was some extreme valuations. And now it's just given back a little bit of the profit of the last year.

So, focus on the longer term with your business and with your portfolio. That would be my last tidbit. 

Jeffrey Feldberg: [00:40:08] Terrific. Ed I've enjoyed your insights and your wisdom. You bring a wealth of experience. Thank you. 

Ed LeMasters: [00:40:18] Thank you for the opportunity has been, it's been a lot of fun. 

Steve Wells: [00:40:21] Thanks, Ed.