B&B001 with Dylan Viola | Know the Game You’re Playing, with Clay Finck
Dylan Viola 0:34
Today, we’re joined with Clay Finck from the Millennial Investing Podcast. Clay’s the host, an investor, and the Millennial Investing Podcast is part of the Investor’s Podcast Network. How’re you today, Clay?
Clay Finck 0:48
I’m fantastic, Dylan. It’s really an honor to be the first guest on your show. Super excited to chat with you.
Dylan Viola 0:55
No, it’s an honor to have you, buddy. I wasn’t really sure how to get started, but I was really curious about how you got into investing. Like, what was your background? What led you into it?
Clay Finck 1:07
Yeah, I love the question, because I love investing. Growing up, I was always really good at math. It came natural to me, and I was never really taught anything about investing from the house, my family I grew up, and from school. I had one teacher that talked about the penny doubling over 30 days into a million dollars. It’s like, Okay, how do you double the penny? Like, they never teach that part of it. So yeah, growing up, I never really learned anything about investing. But I grew up in Nebraska, and for whatever reason, when I was 18 or 19, I bought the book called The Snowball, which is Warren Buffett’s biography. And reading through that it just started to click for me like, Man, you can take your money, invest it and compound it, you can invest month after month and you can eventually be a millionaire. I just thought that was incredible. I’m like, Why is no one talking about this? So that’s when I first learned about the concept of investing. And luckily, sometime in college, I must have Googled like, The best investing podcast, because I was on the road going to classes all the time, and obviously discovered the Investor’s Podcast Network. And that’s when it really clicked, like why investing works the way it does, why you can turn X amount of dollars and grow it over time. And it’s pretty clear to me that Preston and Stig were really ethical people. They knew what they’re talking about, and I could tell that they understood what you should focus on. You could see them transition over time, how they focused on Warren Buffett’s value investing principles, and then they expanded to strategies that maybe worked better. Preston has his own show on Bitcoin. They talk a lot about macro now. And yeah, that’s my journey with investing. So I’ve always been a huge fan of TIP. Again, I started listening to them back in college. Like 2016, probably. So it’s been like six years I’ve been listening to them. And yeah, investing is just a game I love to play and love learning more and more about.
Dylan Viola 3:26
Yeah, I’m a little jealous, because I didn’t really get into it until like 2019, I guess I would say. And man, I remember just hearing Preston and Stig talking about Bitcoin. And it was a mastermind. It might have been like Q4 2019 or Q1 2020. And I had already heard about it. Like, I heard about Bitcoin in 2017. And I tried to buy it, like $2,800 or something like that, but I didn’t trust Coinbase. So like, I put in my credit card, not my debit card. And they were like, No, we don’t we don’t take credit, dude. You gotta pay with debit.
Clay Finck 4:04
I somehow managed to buy a little bit in 2017, but obviously wasn’t as comfortable then as I am now.
Dylan Viola 4:09
Yeah, man. I kind of regret it, but I know my mindset back then. Like, if I would have bought two at $2800, which I was trying to do, I would have sold to at like $3400. And be like, I made 1,200 bucks, you know? And then bought a gun, or I don’t even know. I would have bought something stupid, because I didn’t know anything about investing. And I really still don’t. Like, if you start talking about beta and gamma, you lost me. I don’t know. I just buy stock from companies that I believe in. But I know in our conversations leading up to this, you told me you were an actuary. And then I Googled it. I was like, Alright, what is an actuary? And it’s essentially, if I had to word it, it’s a financial risk analyst. Is that close to right?
Clay Finck 5:02
From a basic level, I like to explain it as like a finance professional that’s specific to the insurance industry. And I think actuaries are most widely known for being risk managers. So you think about your typical company, say Coca-Cola, they sell a bottle of bottle of Coke for, say, $1, and they know their input costs are going to be 25 cents. They know that upfront before they even sell the the bottle of Coke. Well, an insurance company sells, say, a life insurance policy, and they don’t know how much that one policy is going to cost them. If you buy a 10-year term insurance for 100 grand, the company doesn’t know if they’re gonna pay you 100 grand over the next 10 years or if you’re gonna live through and they’re gonna pay you zero. So that’s where actuaries come in. They’re figuring out, Okay, if we sell a policy to 100,000 people, then we have a good idea of how much that’s going to cost the company. So the actuaries are figuring out what the benefits or expenses are going to be. They have to figure out, Okay, how much should these people be paying in premiums based on how healthy they are? And then actuaries might even work on the investments team where they need to match their cash flows, their assets and liabilities and such. So the actuarial background definitely helped as an investor, because it was a very math-based field. And again, growing up I just loved math and had an interest in business, so that’s why I chose the field. And the typical day-to-day of the work is really similar to your typical corporate job. And that lifestyle is great for some people, but it just didn’t really feel right to me. I got my first job out of college at a smaller company, and luckily they had more of that startup feel, so I enjoyed having to figure things out on my own. And the job did have a lot of the finance background, like I mentioned, and to get credentialed as an actuary, you actually have to take a number of these rigorous exams. And I was tested on things like discounted cash flows, and this Black-Scholes formula, which is the formula behind options. You mentioned the delta and gamma — like, I don’t know too much about that, but I definitely used them in those exams years back. And more than anything, I just learned how to be a really good problem solver through being an actuary, and developed that work ethic that is needed to do a good job. So developing those ethics and principles and critical thinking skills is really important, and I think can be applied to investing. And I think that was a really valuable experience for me.
Dylan Viola 7:51
Yeah. So I was Googling it. And it said it takes like 7–10 years to become an actuary. And I guess it’s a 4-year degree, maybe like math, economics. It said you’re taking tests for 3 years to get to the fully certified actuary. And I was like, Man, that’s ridiculous. That’s so long. Like, you could be a doctor. And then I was thinking, What was the moment in Clay’s life that told him like, Hey, I’ve done all this — I’ve done 7 years of work. But now I want to start a podcast. I want to talk about investing. I want to talk about what’s changed in the world. What was it for you? What led you down that path?
Yeah, so I guess first off, what drew me to the actuarial field was first it fit my skill set — I was good at math and really like business, and my university in Nebraska actually had a really good program for it. So one of the things that drew me to it was: I can make money out of college, getting an undergrad degree — make decent money. With many of these other fields, you have to go on and do additional schooling. So, like you mentioned, a doctor — a doctor doesn’t actually enter the workforce until they’re around 30. Whereas I was entering the workforce at 22. But I was taking the exams while I was at work, so the exam process — you can be an analyst without having the credentials. You could have one or two exams and be an analyst. And so I passed a few of them in college and then I passed a few after college, so I got credential three or four years into the career. But how in the world that led me to podcasting? So like I said, I was just a huge fan of TIP, and I enjoyed working with actuaries, and it seemed like over the years they kind of developed that passion for the field, and I kind of thought that would eventually come for me. But I bounced around — I worked at two different companies out of college, and that passion and deep interest in the field, it just never really came to me. So in the back of my mind it was like, Okay, if this isn’t the field for me, what do I want to do? I loved investing, and I was contemplating whether I wanted to stay in it or not, and I was trying to figure out where to go with that, especially since I had invested so much time into it — these exams took a couple hundred hours of studying each just to pass the exam. So I was passing one or two a year. And out of the blue, TIP posted that they were hiring for their Millennial Investing Show, and that immediately caught my attention. I guess initially — I’m kind of introverted. Like, I don’t want to run a podcast. But then one of my buddies happened to text me — he’s like, Dude, you gotta apply to this. And so I applied — had zero expectation of getting the job, honestly. And they interviewed a number of candidates. And I think the thing they saw was just how passionate I was about TIP, and I think that’s why they ended up selecting me. Luckily, they did. I didn’t ever imagine myself being a podcast host, especially working with the people I looked up to and just saw as almost mentors, even though I never talked to them. I saw them as mentors because I was listening to them every single week, just learning so much from them. And I love podcasts. I still listen to podcasts all the time. And I figured, What the heck, I might as well take the job. And they required that you work with them full-time, and that meant I had to quit my current job, so that was a big step. And I figured, Hey, if I don’t like it or it doesn’t work out, I can always go back. And now it’s like, there’s no way I’m going back. I love it. I’ve really enjoyed it. Honestly I wouldn’t trade it for the world.
Dude, and I gotta say: you’re a natural. Like, I went back, to prepare for this show — I listened to your very first interviews. I would have never known that was your first interview. I would have been like, Alright, Clay had a podcast, Clay then just switched and worked for TIP — no, dude. You’re great. It’s because you’re a natural, and I gotta say I agree with you 100%. Preston and Stig, they’re like role models, almost. Everything they say is very ethical, very moral. And it’s like you know that they try their hardest just to help. And yeah, they make some profits along the way, but they just seem like really good people. But on the note of the podcast and some of the guests you’ve had and some of the little mini episodes you’ve had, what are some things you learned that really opened your eyes? Like, Oh, man, this is world-changing!
Clay Finck 13:13
Yeah. Nowadays, it’s pretty easy to get siloed into one way of thinking, whether it’s value investing Warren Buffett-style, or whether it’s Bitcoin or whatever else — I think the one thing I’ve adopted since joining TIP is to have more of that balanced approach, because I like bringing on a wide variety of guests and getting different viewpoints. And I think it’s just so easy to get siloed into that one way of thinking. And then you hear from these other people and you’re like, Yeah, they see the world in an entirely different way. So one quote, I’d pull from my episode with William Green. His book is fantastic, by the way — Richer, Wiser, Happier, behind me. Yeah, he has this point that — I can’t remember which investor it was — it’s like, The future is unknowable. Like, you could love Bitcoin, think it’s gonna take over the world, but you don’t know whether that’s actually going to happen or not. And there’s always a chance that it might not happen. So I try and take a more balanced approach. And whenever someone is 100% sure on something, I think it’s a pretty good idea to be a little bit skeptical. That doesn’t mean I’m not really bullish on Bitcoin. I just want to ensure I’m not getting siloed into that one way of thinking and thinking that, Yeah, there’s a 100% chance it’s going to do really well, so I should put 100% of my assets in it. I think that’s kind of ridiculous. If you want to do that, then more power to you. But I think there’s just more of a reasonable way of looking at it in which you can have other assets and bets in case one of them happens to not work out. I like Ray Dalio’s idea of what he calls the holy grail of investing, and it’s this idea of having a number of uncorrelated bets. And I think it almost builds like a bulletproof portfolio that will do well in almost any scenario. So over the past couple of years, my position in Bitcoin has obviously increased dramatically as I’ve added more to it, and the price has gone up. But of course, past returns don’t guarantee future returns. So I’m starting to transition to more of a balanced approach of owning individual stocks. I’ve started adding to precious metals like gold and silver. Pretty soon I’m gonna have an episode to talk all about gold miners — I’m excited for that. And currently, my portfolio mainly consists of index funds and Bitcoin, but I’m starting to add to those other pillars to, like I mentioned, try and build that bulletproof portfolio.
Dylan Viola 15:53
Yeah, so I actually noticed the Principles [by Ray Dalio] behind you, and I haven’t read it but I’ve listened to the audiobook version — cheating, of sorts. But I was thinking about the bulletproof portfolio where he talks about — maybe it’s seven, maybe it’s eight — uncorrelated investments. It is so hard to find anything uncorrelated. I mean, Bitcoin and the NASDAQ — they’re like 100%. If the S&P is going down, everything’s going down. The one thing I can find that’s kind of uncorrelated right now is Bitcoin and energy. But I mean, have you found any success finding anything really uncorrelated?
Clay Finck 16:34
Yeah, that’s a really good question. I think if you look at the really short timeframe, it does seem like everything is going down relative to the dollar. I think if you zoom out, though, and look at the bigger picture, you might not find that to be the case. But I agree with you that energy and those commodities are running hot because of inflation. And I think that a number of the other assets all depend on — Preston talks about this all the time — like, most financial assets in the world are valued based on interest rates, and if interest rates are going up then those financial assets are going down, so that does make it more difficult. When things are tightening, a lot of times people are going to be selling whatever assets they need, so that makes things fairly correlated maybe in the short-run, but I think most of us are long-term investors. So I think over the next 10 years, you’re gonna see vastly different returns between, say, gold, Bitcoin, index funds, individual stocks. And as a long-term investor, I think you should keep that in mind, to try and zoom out, so to speak.
Dylan Viola 17:49
No, yeah, I hear that. One of the things that gets me about gold — like, I’ve listened to a few people in gold, especially Luke Gromen. I don’t know if you ever listened to him. I have the Mr. X Interviews back there — that’s a really good book, by the way. Gold — so say you Google it: what is the cost of gold per ounce? And it’ll say, $2,000. I don’t know. $1,875. You go to a gold store local to you — it’s gonna be like $300 more per ounce. I don’t know why, but I can’t bring myself to buy when I know they put like a 15% markup — or I guess it’s not 15%, but it’s it’s a markup that’s noticeable.
Clay Finck 17:50
Yeah, there are places online I’m pretty sure you can get a really good spread. I believe you can get physical gold about for the price that’s quoted online.
Dylan Viola 18:40
Alright, so you were talking about building a silo, and then I was thinking about a story you told on Jesse Livermore on your podcast. And I don’t remember what year it was, but essentially he made what is billions in today’s market in a matter of days. And then he continued to just go all in over and over and over until he lost it all. And I’m thinking like, How do you check your own bias? How do you check your blind spots so you can keep your winners and not have to buy losers, but also not lose it all?
Clay Finck 19:33
Yeah, like you said, Jesse Livermore, he was one of the greatest traders to ever live. At age 30. He was worth, inflation-adjusted, $100 million dollars. And when the market was crashing during the Great Depression, he made, inflation-adjusted, $3 billion in that one week when the market was absolutely going crazy to the downside. His family thought he was losing everything, but he came home from work and he was just like all chill because he just hit a grand-slam. But yeah, like you said, he kept making these levered bets. He thought he could always outsmart the market — the dude can never be wrong. He would lever up, bet the farm on his bets. And eventually, like you said, he lost it all. He ended up taking his own life because of it. So Morgan Housel — this is from his book, The Psychology of Money — he hit on this point or idea of getting wealthy versus staying wealthy. Jesse Livermore was very good at trading — he was very good at taking $1 and turning it into $10. And what he wasn’t good at was staying wealthy — he continued to take these bets where he was risking everything, like literally everything he had built. And I think it’s good to think about, Could you live with yourself if this investment got cut in half? Or this investment went down 75%? Or even if you’re using leverage, could you live with yourself if you are wrong short-term and then your account gets blown up? So related to that, you’re talking about the biases. 2020 and 2021, many people were making money on investing — like, people I’d never even imagined buying a stock were messaging me telling me how they 10x’ed their money on GameStop or whatever. So in periods like that, something I learned is that sometimes you might have a winner or two, and you might be smart, but you might just be really, really lucky. So to help keep myself from, say, getting greedy, I just continue to learn from different viewpoints and try and keep that balanced approach, like I mentioned before. And when it comes to Bitcoin specifically, I know you wanted to talk about that a bit. I generally just like to let it run. I can keep my cost basis in mind, keep in mind how much I’ve put in. And I’ve been in it for a couple years now, so I’m kind of used to the volatility and know that, Yeah, at anytime this thing could get cut in half or even more. I’m along for the ride, and I think having that balanced portfolio will help weather through that volatility. So yeah, I think it’s important to stay humble. Whenever you feel like you want to be bragging about your gains, that’s probably time to maybe rebalance, if that’s the approach you want to take. Yeah, I think that’s good.
Dylan Viola 23:02
I feel like it wouldn’t take a lot for me to actually end up being Jesse Livermore, besides for the killing himself thing. But the fact that he feels like he can’t do wrong, because one of the very first investments I ever made was Bitcoin. I listened to Preston talk about it, I bought it, and then it was just like — I started researching and then it just seemed like, How can I be wrong? I don’t understand how could this be wrong? It’s so right! But then there’s the toxic Bitcoin maximalist thing — and I’m close. I’m close. I’m like 70%. I have a 401k. My 401k is is mostly energy stocks. And then I have a little Fidelity account that’s got some ZIM, which is some Israeli shipping company my dad told me to buy because he’s like, Dude, the dividend pays for itself in four quarters. I was like, Alright, I’ll do it. I’ll buy that. And then I listened to an episode where Trig interviewed somebody on uranium, and I bought some SRUUF, a little uranium trust. But I’d say I’m like 70/30, and I really don’t care if I lose it all. Like, I’m still where I am today because I don’t use it. I live very cheap and frugal, but I think about how easy it is to just end up being Jesse Livermore. Like, I don’t know how to check my bias. I really don’t. It’s tough. But what are the triggers you focus on that make you reallocate? I don’t want to sell my bitcoin for anything, but I think at some point, maybe I have to reallocate — maybe?
Clay Finck 24:49
Yeah, it’s really tough. There’s nothing like Bitcoin. Man, it’s it’s really hard. And again, like I said, you have to know the game you’re playing. I tend to try and be the long-term Buffett-type investor. So when I buy something, I plan to hold it for the next 10 years. So I’m still in the first 5–7 years of my investing journey, and most things I haven’t sold. I have reallocated a few times when I felt like my opportunity cost was so overweighted that, Yes, I want to put more capital towards this specific investment. But living through 2020 and 2021, I think you can kind of feel when there’s that irrational exuberance, and I think just from a risk management perspective, that might be an opportunity to reallocate to some other assets, or even more so cash. But one of the things that Housel actually talks about in his book is taking in an investment approach that lets you sleep well at night. So if there’s any point where you’re up at night because of a) these crazy gains you could be making if you invested in this, then that’s probably a red flag that you probably shouldn’t try and overallocate towards that. Or b) just the not sleeping well at night because of your leverage and you might get margin called the next day or the next morning. So thinking about what investment approach is going to allow you to sleep well at night, I would say, for those that are overallocated towards Bitcoin but might not understand it quite as well as someone as, say, like Preston Pysh.
Dylan Viola 26:47
On another train of thought, being this is called Books and Bitcoin, we’ve talked about Morgan Housel’s The Psychology of Money. We’ve talked about Snowball, which I guess isn’t a biography of Warren Buffett — maybe an autobiography? And Principles. What other books have shaped you and your whole life view? Your investing journey? Just really anything?
Clay Finck 27:15
Yeah, I think that before you learn any specific skill or topic, whether it be investing or anything else, you really have to have the right mindset and habits put in place, just coming around to that idea that your daily habits have such a huge impact on your life. Like, so many people today, it seems like, have a negative negative outlook on life in general and on the world. And I have a lot of people or friends that will mention to me that I’m optimistic at root and I’ll always have the positive outlook on the world or always be putting that positive spin on whatever situation. So if you don’t hope for a better future, see a better future, then it’s pretty hard to want to get up in the morning and improve yourself and improve the world. So one book I’d read in college that kicked off this feedback loop is The Compound Effect by Darren Hardy. That kind of kicked off my self-improvement journey. And I think that helped to get the dominoes falling for me, as one thing leads to another leads to another. And I think it’s just a really good like starter book, and a great book for someone that was in college like I was at the time. So I’m really thankful I read that one. Another book related to mindset is one that Preston Pysh actually I saw recommended one time and it’s called The Magic of Thinking Big. I got this book, and it’s just one of those books that makes you want to be an eternal optimist. Like, being an optimist is how you naturally want to improve yourself and improve the world. And honestly, it’s a lot more fun when you’re always looking for that positive side of things. Life’s just a lot more enjoyable having that kind of attitude and mindset. It’s the book I’ll pick up and read every few months, every six months or so — great book. And then investing-wise — honestly, a lot of what I’ve learned is just from TIP’s podcasts and other podcasts. But Preston would say they wrote a book called Warren Buffett Accounting that helped me wrap my head around how Buffett invests in stocks, just the holistic top-to-bottom how he thinks and how he invests in general. And then two other just incredible investing books is Richer, Wiser, Happier by William Green, and then The Price of Tomorrow by Jeff booth. Both are books I’ve referenced often just because they’re full of incredible insights. And all these books are ones I really look back on and I’m recommending others to others as well.
Dylan Viola 30:13
That’s a great list. So actually a few of them I haven’t read. The Magic of Thinking Big — dude, I need that in my life because I read way too much ZeroHedge, so I have a very negative outlook on the way things are going to be going going forward. I literally just went to Walmart and bought like $500 of peanut butter and crackers in case there’s a food shortage. So I’m glad you said that — that’s probably next on my list. Do you ever buy way too many books than you can actually read?
Clay Finck 30:49
Oh yeah. I feel like I’m buying a book every week and I’ll get through maybe half of it and it’s like, Okay, I kind of get the point so I don’t have to finish it. Yeah I have books stacked in front of me that I haven’t read.
Dylan Viola 31:04
I don’t know if I ever finished a book. Like, I just buy them and then I start reading and I get like three-quarters of the way in and then, boom, I’ll buy another. Just in the mail yesterday I got Richer, Wiser, Happier — I just ordered it. I haven’t read it yet. But I also have Ray Dalio’s the new Principles: The Changing World Order. And that thing is thick — it’s a thick boy. I don’t know if I’ll get to it.
Clay Finck 31:33
Yeah, you get that dopamine hit when you order new books. I think that’s part of it too.
Dylan Viola 31:37
It’s like my whole life I hated reading books. Like, I hated English class, I would do the SparkNotes — I would never read them. And now all of a sudden at 29 years old I friggin’ love books. So dude I wanted to ask — Peter Thiel, Zero to One — I love that. To sum it up, it’s, Buy monopolies, create monopolies. And I listened to your podcast the other day about Google. Do you know another place? What do you think is another monopolistic play in the market today?
Clay Finck 32:17
Yeah, so related to monopolies, Buffett is just a huge guy on insuring that the companies he’s invested in have a strong competitive moat. And that’s exactly what a monopoly is — like, no one can compete with them. And Buffett knows that these companies will kick off free cash flows for many, many years to come. And if you can buy a company that’s good enough, then they’ll be able to re-invest and grow them over time. So thinking about monopolies, I think it’s something worth considering, for sure. And this is something I’ve thought about a lot lately. There are times where I’ll get attracted to this idea of buying a really cheap, deep-value pick, because I’ve come to realize that over the long-run, a lot of money can be made — there’s these two paths in investing: you can buy these deep-value picks and continually flip them and continually buy stuff that’s really cheap, or you can buy something that’s not near as cheap but is super high-quality and has that monopoly characteristic and will compound over time. I was actually looking at eBay’s financials, and they’re like pretty cheap. Looking at their free cash flows, it’s like a 7% free cash flow yield, and they’re kicking that off every single year, and that’s pretty good in today’s market environment as far as free cash flow yield. And then I was thinking about it and meditating on it and zooming out and it’s like, Okay, do I want to own these really cheap companies? Or do I want to own these long-term compounders? Like, I’m still in my 20’s, so I can still hold something for a really, really long time. And I recently listened to William Green’s interview with Bill Miller, and he said that if he was starting a portfolio from scratch today, he’d put 20% in Amazon. And Amazon is the obvious alternative to eBay. In 2021, Amazon accounted for 41% of all e-commerce sales, and that industry alone is growing at double-digits over the next few years, and it grew at 14% a year in 2021, and we all know that Amazon is a really good business. They aren’t technically a monopoly like what you mentioned, but they have such a massive competitive advantage in the online retail space, and they dominate the industry. You don’t have to be a monopoly in the e-commerce space. Right now it’s a $4 trillion-dollar industry. So when you take a step back and look at just this one example that I’m focusing on — the eBay vs. Amazon — it seems pretty obvious that someone who’s young and has that long time horizon would much rather own Amazon. Over the next 1 or 2 years, you might make more money on eBay, but over the 20-year time-frame it’s not even comparable what the two — like, playing the long game, most people aren’t playing that long-term approach, and I think that’s a big advantage that individual investors can have. And back to Amazon, they just have so many tailwinds — they have the e-commerce, the AWS, the advertising — all of them just have tailwinds pushing them up. And for investors with a long time horizon, I personally think that a lot has to go wrong for that to be a bad investment. So I like Amazon a lot — it’s probably an obvious choice, given it’s a FAANG company. And then you mentioned Google — I think that’s another one. And it’s not that both of these are monopolies, like that’s the only reason you should buy them — I also think that today they’re trading at really attractive prices for those that are willing to hold for the next 5–10 years. And obviously they can go lower just like anything else, but those are definitely two that I like that I’ve looked at recently.
Dylan Viola 36:39
So when I think about Google and Amazon, I think about NASDAQ, QQQ — whatever, and if I looked at January 2021 price versus today, I’m guessing they’re probably down 25%. Somewhere in that range, like it’s big and painful. So like it’s something you want to buy long-term and if it’s something you want to buy you buy it today? Or do you wait for the shakiness, uncertainty of the macro outlook to play out? Like, do you just sit on the sidelines in cash for something like this?
Clay Finck 32:17
I feel like I can tie every single idea back to Buffett. I went to a shareholder meeting in Omaha. Luckily I live in Nebraska — I live in Lincoln, so that’s right by Omaha. But he had $140 billion in cash at the start of the year. And he spent just over $40 billion in purchasing stocks in Q1 2022. So he’s definitely not trying to time the market or wait for a deep recession or whatever, he’s just buying. And to apply that to my own investment philosophy, I think I would be buying right now, but I would also ensure that I have some extra cash on the side, because yeah I do think things will get better before they get worse in the near-term, but also I don’t want to act like I can just try and time the perfect bottom, because you never really know what’s exactly priced into the market. Like, recently we’ve seen interest rates top out and come down a little bit. Some of these macro thinkers might have expected that, but with the high inflation, how could you really expect that, is the way I consider it from first principles. I wouldn’t expect rates to continue to sell off with persistent inflation. So to answer your question, I do a little bit of both. I am adding, but I’m still ensuring that I have extra cash in case that March 2020-type event comes.
Dylan Viola 39:06
Yeah. Okay, that’s what I’m doing too, I just wanted to word it to you so you would answer for me. I’m a Jesse Livermore-type so I’m using leverage. I don’t trade with leverage, but I will take out a 401k loan or refinance my house, so it’s a leverage not tied to my investment. So I took a 401k loan but it’s sitting in cash, and I’m every week just buying a little bit. Maybe it’ll go lower, maybe it’ll go higher — I don’t know. I have no idea what’s going on right now. It’s crazy. It really is crazy. But I’ve seen some people calling for October, but how do they know? They got a crystal ball? I don’t know. I just want to have some in the account for October just to see. But Clay, I think that just about wraps it up, buddy. And I really appreciate you — it’s wonderful. You really carried the show. So give them a hand-off where they can find you, where they can listen to you. Anything like that.
Clay Finck 40:09
Yeah, Dylan. Thanks for having me, I really enjoying coming on this show, and I always enjoy helping out fellow podcasters that are getting their podcasting journey kicked off. So I’m on Twitter, @clay_finck, and then like you mentioned I host a podcast called Millennial Investing. And really I’m just trying to help millennials or anyone in general become better investors. It’s a learning journey for me just as it is for them, and this is what I do full-time, and I’m just trying to provide as much value as possible. I’m just trying to help as many people as possible. So yeah, that’s where you can find me.
Dylan Viola 40:55