Are Josh Brown And Michael Batnick The Howard Stern Of Financial Podcasting?

Jonathan (00:00:00)

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Michael (00:00:26):

Jonathan, now that you asked, but I think there is a perception to the outside [00:00:30] world that we are content creators who also happen to run an RIA and that's backwards. We run a wealth management firm and we run it really well. And yes, we do create awesome content, if I may be so humble to say that, but the formula or the percentage in terms of how awesome we are at creating content and how awesome we are at delivering institutional quality kick ass advice to our clients has evolved over the years.

 

Jonathan (00:00:59):

Welcome [00:01:00] to The World According to Boyar, where we bring top investors, bestselling authors, and business leaders to show you the smartest ways to uncover value in the stock market. I'm your host, Jonathan Boyar. Today I'm joined by Josh Brown and Michael Batnick of Ritholtz Wealth Management, which is one of the fastest growing RIAs in the country with approximately $8 billion in assets under management. Josh is the CEO and co-founder and is one of the most recognizable market [00:01:30] commentators on CNBC, A longtime Halftime Report Panelist, the creator of the Reformed Broker and the author of several books. Michael is a Managing Partner at Ritholtz, author of Big Mistakes, writes the Irrelevant Investor and co-hosts Animal Spirits. Together, Michael and Josh host a Compound and Friends podcast, one of the most popular investing podcasts with 1 million plus views a month and growing rapidly. [00:02:00] I was recently a guest on the Compound and Friends and I had a great time with Josh and Michael, so I'm especially excited to continue the conversation here. What I want to explore today is not just the markets, but how Josh and Michael helped build the firm, a media platform, and a following by refusing to sound like traditional Wall Street. Josh and Michael, Welcome to The World According To Boyar.

 

Josh (00:02:22):

Hey

 

Jonathan (00:02:22):

Buddy,

 

Michael (00:02:23):

On an intro. Thank you.

 

Josh (00:02:24):

Yeah, nicely done.

 

Jonathan (00:02:26):

I try my best. I want to start by something my dad said after [00:02:30] I was on the Compound and Friends, and he called you guys the Howard Stern of Financial Podcasting and he really meant it as a compliment, not the shock-jock part, but the interviewing. Funny, curious, unpredictable, and able to get people to say things, myself included. They probably wouldn't say on a traditional finance podcast, and you can ask my wife and attest that I was much more relaxed than usual. I laughed at his comparison, but you know, I thought about it more and it really made a lot of sense. Stern built [00:03:00] a fiercely loyal audience by refusing to sound like everyone else, and over time became known as one of the best interviewers of all time. Josh, I see that similar in your own evolution. Going back to the early Reformed Broker days from once. You described yourself as a pugnacious, sarcastic, cynical voice, though still optimistic

 

Josh (00:03:20):

Sounds right.

 

Jonathan (00:03:21):

Two, as you later put it, I'm not that guy anymore. And now you and Michael have one of the biggest and most respected podcasts in the finance along [00:03:30] with a leading RIA firm. So Michael, let me start with you. Is the Stern comparison fair? Is my dad nuts and doesn't have to be mutually exclusive.

 

Michael (00:03:38):

Your dad might be nuts. I've never met him, but , the Stern comparison is very fair. Being a child of Long Island, I grew up a lifelong Howard Stern fan. I remember very early on, I was probably eight or nine years old watching him on E and my mom's saying, turn that off right now. You can't watch him. And immediately I was like, oh yeah, well, I'm gonna watch him. I've spent probably literally a thousand [00:04:00] or more hours with Howard, and one of the things that resonated with me and millions of listeners is his authenticity, genuinely saying whatever came to his tongue and not having a filter. Now Josh and I have to have some filter because we are legitimate professionals and we do have clients that don't wanna see us behaving like whack packers, but the ability to be vulnerable with your audience and real, sometimes you have to laugh at yourself and take what we do seriously, [00:04:30] but not take ourselves too seriously. Was 100% imprinted on me as a young content creator. So it wasn't like, okay, I'm going to become the Howard or here's what Howard would say. But it was just this overarching idea of this is how you build a connection with your audience. You just be yourself.

 

Jonathan (00:04:47):

Josh, what about yourself?

 

Josh (00:04:48):

I grew up listening to Stern and maybe some of that rubbed off on me without me having really thought that much about it. The way I think about it is we're all gonna be dead in 30, 40 years anyway, and it's [00:05:00] important to be serious when you're talking about people's money and investing, but it's important also not to take ourselves too seriously. I don't have a problem with being the butt of a joke muted as Michael. We're pretty laid back when it comes to like what people think about us personally. I think one of the things that's helped me is by now, and Jonathan, you could probably say the same, and maybe you two, Michael, by now I've pretty much met everybody on Wall Street. I know the most successful people. I've [00:05:30] been in green rooms with people. I've been at conferences with people, I've been drinking with people.

 

Josh (00:05:35):

There's almost no one I haven't met who's been successful in this business. You very quickly realize that everyone's just a person. Everyone's just a human being. So I think I'm not terribly afraid of being myself with this understanding that, oh yeah, I'm the only person who loses money in a stock, or I'm the only person who's ever been wrong about something publicly. Come on. So I think [00:06:00] a lot of people are very guarded in our business and there's a good reason why people who are paying them to invest for them, they wanna believe that you know more than everyone else or you can see around corners or you can somewhat predict the future with all of your experience and your wisdom. I've met too many people and seen too many rising and falling situations where I get it, I understand it, and I'm not afraid to be a part of it.

 

Jonathan (00:06:25):

There are very few of those people who are willing to go on a podcast with like Patrick [00:06:30] Osuna to see and say that if you were a stock, you'd be Yum! Brands. That's genuinely funny, people can relate to it. People love it. I mean, to me, that's great as long as you also can show that you can invest. I think that's the magic formula.

 

Josh (00:06:45):

It's an interesting thing to know a lot about investing and then not act like you are the person that knows more than everybody. I think it's more interesting to the audience to listen to someone like that as opposed to somebody who's genuinely trying to come off like they know everything [00:07:00] or they know better or everyone's an idiot only. I am smart. I think that that would wear people out. You build a connection with the audience, I think through wins and losses, being right, being wrong, owning it, not running victory laps every time something you say turns out well and then not hiding every time something you say turns out not so well.

 

Jonathan (00:07:22):

And Michael, when you helped build Ritholtz, you threw away the old traditional broker model what everyone else was doing [00:07:30] and created something that was totally unique. Was that done purposefully the same way that you had this podcast that you were genuinely yourself?

 

Michael (00:07:39):

When we started this in 2013, we didn't have a five year plan or a 10 year plan. For me personally, I am very much a day-by-day type of person. I want to get better every single day. And I'm not like a weirdo where I'm like, journaling, did I get 1% better today? I'm not like a hack motivational type of guy, but we had no idea where this [00:08:00] is going. All that we knew is that we can count on each other to show up every day, try and kick ass for ourselves and our clients. And that's what we've done and we've evolved over the years. What we're doing today looks nothing like what we're doing in 2013. Thank God the industry has evolved and we've evolved with it and we're very proud of where we came from and where we are and where we're going.

 

Josh (00:08:16):

So I actually did have a five year plan, but I didn't let Michael in on it. I wanted to see if he could arrive there on his own. I monitored his progress and amazingly he like sort of intuitively got the plan even without [00:08:30] me having shared the details.

 

Michael (00:08:32):

This guy.

 

Josh (00:08:32):

Very impressive. It really was,

 

Jonathan (00:08:34):

As I mentioned in in the intro, $8 billion, 1 million views or so a month, and that's growing rapidly. If someone told you that Josh, when you were starting the Reformed Broker and the depths of the financial crisis when you, I think you were 31 and didn't really have a dollar to your name, could you ever imagine this whatsoever?

 

Josh (00:08:55):

No, and one of the key things is that the people that helped me do this, I didn't know them at [00:09:00] the time, so forget about like whatever I thought my own potential might be. I hadn't met the people that I would end up creating this with. So you just like start writing. You have no idea the roads that it's gonna go down, the people that you're gonna meet, the access to events and information and the connections that you'll make, the people who reach out to you, there's no way to know. You take the first step, you take the next step, things start to happen. You learn from your mistakes. You [00:09:30] say, all right, I'm not going in this direction anymore, now I'm gonna go in this direction. And a lot of it is just intuitive. It starts with the first few steps and then you gotta make a lot of the right decisions along the way. I don't wanna act like I just bumbled into what we're doing. There's some deliberateness to it, but there's also a lot of stuff that I wish I could have done differently. And it is what it's

 

Michael (00:09:52):

Jonathan now that you asked, but I think there is a perception to the outside world that we are content creators who also happen to run an RIA and that's [00:10:00] backwards. We run a wealth management firm and we run it really well. And yes, we do create awesome content. If it may be so humble to say that the formula or the percentage in terms of how awesome we are at creating content and how awesome we are at delivering institutional quality kick ass advice to our clients has evolved over the years. So in 2013 when we had just started this, the reality is we were trying our best, but we were better at creating content than we were [00:10:30] at delivering advice. That's just a fact. And over the years, the gap between those two has closed to now they are at least on parody. And for the people that don't see the inside of our machine that we've built, like the wealth management side, it is every bit as strong as what you see on YouTube. And if it wasn't, we wouldn't be at $8 billion in growing the way that we are. You can't fool somebody. Nobody's ever said, Hey, you guys are hilarious. Take my money. You have to be able to deliver, not just get them in the door [00:11:00] with what you're able to show them, but you have to deliver the value. And of course the wind has been our backs with the market, but we are delivering value for the clients, otherwise they wouldn't be with us.

 

Josh (00:11:09):

It's such a good point. Some of my original rants were about how like having a lot of a AUM doesn't mean you're good at anything in particular, but over the years my thinking has evolved. I actually think not just AUM but AUM growth is the tell that somebody actually knows what they're doing. Because to Michael's [00:11:30] point, you can't fake it. If you have clients, they have money with you. If you're blowing up accounts all day long behind the scenes, you won't grow your a AUM. You're gonna have as much money leaving out the back door as you have coming in the front door. So we've grown the firm at, I don't know, 38% annual CAGR since we founded the firm. Getting bigger has not slowed down the growth rate, which means we're getting better at onboarding even larger account sizes. Maybe you could do that for three years. [00:12:00] You can't do that for 13 years, going on 14 years and not be producing good results and good outcomes for clients. They won't stay.

 

Jonathan (00:12:09):

Michael, what did you learn to go from just being a great content creator? Both of you are, there's no denying it. 500,000 people a month are not gonna listen to your show if you weren't to how to become a better RIA leader.

 

Michael (00:12:24):

Our philosophy hasn't changed that much since we started the firm. We know with investing what [00:12:30] didn't work, okay, there's a lot of different ways to skin the cat, but we know for sure what didn't work, which is just like discretionary market timing, macro bullshit, pretending you're a master universe. So we had the philosophy in terms of here's how you build long-term wealth and here's how you deliver good outcomes for your clients. So it wasn't like in 2013, we thought this by 2015 we're like, holy shit, wait no. Now we think this. It was a slow evolution. And because we are cranking out so much content, we are a magnet. We are a gigantic magnet for talent and it is the [00:13:00] people and the talent that we've attracted from the advisors to the operations people, to the client services associates, to the tax people, to the lawyers, every step along the way. We have just added incredible people with different skill sets and one plus one has now turned into 15.

 

Josh (00:13:16):

Yeah, I think a secret weapon, when we need somebody, we need another accountant. Michael and Ben go out on animal spirits. Those people end up coming from their listenership. Now think about how dedicated somebody has to be [00:13:30] to be a professional and in their free time be listening to financial podcasts. So you're already a step above. Now it's a person who actually feels like they're a part of what we do already. 'cause They listen every week. They're a fan. When they hear that there's an opportunity to come do what they do at some vanilla, nameless, faceless firm and they get the chance, wait a minute, I could do what I do, but do it at Ritholz. The right people end up coming to us. When you look at our [00:14:00] top performing employees, not just financial advisors, but in every role throughout the firm, whether it's traders or operations people or client service, everyone that's here understands that this is like a fan first firm. The people that they're doing things for and taking care of are fans. And why that's notable is that a lot of the people who work here started out as fans. So there's an instant kinship between the people [00:14:30] we're working for and the people inside who are doing the work. They're all part of this bigger base of people that have this one really big thing in common.

 

Michael (00:14:39):

So Jonathan, that's the entire thing. Josh, cover your ears. When I met Josh, I was his biggest fan in the world in like a very weird way. Like I was stalking him and I found him. No, I'm kidding, <laugh>. But that is the story of the firm. Everybody that's here from myself at the beginning, to everybody that's followed between our employees and our clients, they all [00:15:00] started as fans. And one of the things that's been able to allow us to learn and evolve and iterate over time, really quickly, mind you, we've made a a million mistakes. The things that we, okay, this isn't working, let's do something else. We had no outside capital. We didn't have outside investors that were looking over our shoulder and saying, Hey dummies, you are doing this. You should be doing that. Oh, why? Because you say so. We were able to control our own destiny and it's a lot more fun. Listen, none of us have an [00:15:30] MBA. We're not business school people, but it's not rocket science building a business. It's do the right thing and continue to do the right thing and keep doing the right thing and you'll build something great over time and when something isn't working, you do something differently. That's what we've done consistently.

 

Jonathan (00:15:44):

I hope you're enjoying my conversation with Josh Brown and Michael Batnick. Before we continue a quick note about Boyar. At Boyar Research, we spent over 50 years conducting independent research on public companies. We analyze stocks the way a business owner or [00:16:00] acquirer would determining what a company is really worth, not just where the stock happens to trade. Today our research is used by professional investors, family offices, and other sophisticated investors looking for differentiated stock ideas. Through Boyar Asset Management, we also manage money using that same patient value oriented discipline. To learn more, visit boyarvaluegroup.com. Now back to the conversation. You bootstrapped this thing. I think I read yesterday, [00:16:30] Josh put 30,000 into a Chase account and Barry put 60 grand or whatever it is. So people had to have been helpful. People had to have been generous without doing things for their own interest. But because they like you guys, and I'd love to hear how people build businesses, who were the two or three people who were most helpful along the way who didn't need to be helpful. They just did it because they liked you guys.

 

Michael (00:16:51):

First of all, the clients that joined us early when truly we were an experiment. We are forever, forever indebted and grateful to those people. [00:17:00] That took the leap with us, but my answer would be each other. Not to discount anybody that's helped us out over the years, but I think it's each other. We really did this together. I can't speak for Josh, but I don't have an outside mentor that showed me the ropes or told me how to do business. It was doing this with my partners.

 

Josh (00:17:17):

I'll agree with everything Michael just said and then I'll add some industry people. I'd say the first one is John Malloy at CNBC, who had been a fan of Barry's. And then when I came along, he [00:17:30] sort of saw an opportunity for me to be A-C-N-B-C personality. Always stood by me, always believed in me in early time when I was kind of making random TV hits but not really getting any traction 'cause it's very hard to do that. So I would write a great blog post, the whole industry would read it, but translating that to TV doesn't always go well or TV prioritizes breaking news. So you tell them at five o'clock the day before, yes, I'll come on and I'll talk about the thing I wrote [00:18:00] <laugh>, and then the next day they're like, okay, great, you're coming on a half an hour. And by the way, we actually need you to comment on the Fukushima nuclear explosion and what the impact on investors might be.

 

Josh (00:18:11):

So doing that for a couple of years in the wilderness and not really getting any traction and having somebody like John internally pounding the table, you guys don't understand this is the guy and I know that he did that for me a lot and it ultimately ended up with, I was on the first episode [00:18:30] of the halftime report on CNBC. I'm one of the last original castmates on the show, and that's thanks to a lot of internal support from people like John and Mary Duffy and some people that I consider to be my rabbi within that building in the institutional investing world, I'd say Jim O'Shaughnessy was one of the first people who looked at Barry and I and saw something more than like these two schlubs. He saw the vision. Jim is incredibly generous and creative and [00:19:00] it was just this combination of him being willing to take us seriously and us being able to follow his example at building a firm that had his name on it that had meaning in the eyes of investors.

 

Jonathan (00:19:13):

For those who don’t know Jim, who is he?

 

Josh (00:19:15):

Jim O'Shaughnessy is one of the godfathers of factor investing. Long before we were saying things like smart beta, Jim had written a book called What Works on Wall Street in the mid nineties. He was running a boutique asset management firm inside of Bear Stearns. He kind of was [00:19:30] this guru on evidence-based portfolio construction. I don't wanna call it Moneyball for stocks because that's cheapening it, but he was thinking about the quantitative answers to the questions of how do I invest in the right stocks and not invest in the wrong ones? That's such a minimizing of Jim's contribution to investing. Obviously it's much greater than that. But Jim had married this idea of taking a book and building an [00:20:00] audience of people who agreed with his conclusions and then building an asset management business as a result of the fandom of the book. And Barry and I, whether implicitly or explicitly learned a lot from watching him do that, I can name like 10 other people, but I definitely am very lucky to have met people that not only were successful in their own right and were willing to share information about how [00:20:30] they found success, but people who believed in us and didn't look at us like, ah, these fucking guys have a blog.

 

Josh (00:20:36):

That it took us seriously and that gave us confidence to think more about what we were doing as something that had bigger potential.

 

Jonathan (00:20:43):

I think a lot of people think Wall Street is just cutthroat and people are just out for their own interests.

 

Josh (00:20:48):

I haven't found it to be that way.

 

Jonathan (00:20:49):

I found that people generally wanna help. I just think it's a nice thing and people really don't talk about it. Obviously people wanna make money, but it's not at the expense of you.

 

Josh (00:20:58):

Dude, if you had any idea, [00:21:00] the things that Barry and Michael and myself have done for others on Wall Street behind the scenes asking nothing in return, the amounts of opportunities we've created for people, the amounts of credibility that we've lent to people through our involvement in various projects, the favors, the hookups, the connections that we've made for people. I don't do it because I'm like, all right, now pay me back. I just know the people have done that for me. [00:21:30] But I'm telling you right now, if people understood how good we've been to how many people, their minds would be blown. We do not view this industry as cutthroat. We don't think of ourselves as cutting anyone's throat and we really haven't had the experience of a lot of people coming to cut our throats. Maybe it's happened and we didn't even realize it because things have mostly worked out.

 

Josh (00:21:51):

We don't view the industry as a winner, takes all. We've always been very magnanimous in our good fortune and success and we try to [00:22:00] bring as many people along for the ride with us. And the best evidence of that, we throw in an industry conference called Futureproof twice a year in March, we had almost 4,000 people in Miami. The prior September we had over 5,000 people in Huntington Beach. That's an industry event. None of our clients are there. Why are we putting so much time and energy in putting hundreds of people who we compete with on stages? Because we don't view this as you have to [00:22:30] lose in order for us to win. We've never been that way. That's why we have a lot of respect from our peers in the industry. Michael,

 

Jonathan (00:22:36):

Is that an actual business that you guys are doing or is it more you kind of subsidize it and it's great networking for everyone?

 

Michael (00:22:44):

Futureproof is a very much legitimate enterprise. They've raised money. So Matt Middleton is a founder and CEO and leader of it. Him and his incredible team handle all the logistics. Putting out a conferences is a lot of work. Things that you would never think about, oh, we need more [00:23:00] awnings, we need more covering on the sand for the walkways. It is a lot. It's like the Super Bowl.

 

Josh (00:23:05):

Booking out a couple of thousand hotel rooms a year in advance, working with the mayor's office, the city commission in Miami, the fire department. It's a full-time job. Michael and I are investors in it. We're co-founders. Before it launched, we were working with Matt, coming up with the concepts. I came up with the name. We're not running that like running, running that. [00:23:30] We're kind of showing up and being ourselves and inviting all our friends, but a lot of work goes into planning it. It's a business. We haven't pulled a dollar out of it. It's growing, but it's sort of a labor of love. But it gets back to this idea, is it a cutthroat business? No, because why would we bother? Future Proof is about promoting the up and coming voices in the industry and exchanging ideas and listening to each other. Why would anyone share anything with anyone else? If we were at each other's throats, it would never [00:24:00] happen.

 

Jonathan (00:24:00):

So you built Irrelevant investor, you built the Reformed Broker, you have a great RIA, you have a popular podcast. What's next?

 

Josh (00:24:09):

Washboard abs.

 

Jonathan (00:24:12):

What's next? Five years from now, where do you see yourself?

 

Michael (00:24:15):

For me, one of the most exciting things about what we get to do every day with the people that we love and care about and how build wealth for not just our clients of course, but our employees. It's a very special thing that we're able to do. We are one positive [00:24:30] upside surprise after the other, and that's what I find so exciting. Almost none of what we've built could we have foreseen. And it's these things that happen that you're not planning for this piece of technology, this large client, this favor, this, that and the other. Knowing that it's out there and it's coming really is hard to like describe how awesome that feeling is.

 

Jonathan (00:24:52):

Were you ever capped the growth of the RIA business? Is there a level you think where you can get to where it's not as special as what you've [00:25:00] already built?

 

Josh (00:25:00):

I don't think we need to because we've created service tiers and the tiers act as an organizational method to doing everything that we do really well. So for people with zero to $250,000, we're onboarding them into a service tier that we call liftoff. We've been doing that for over 10 years. The custody solution there is betterment. We've got advisors in the background who can help people, but it's very much automated and it's for people in [00:25:30] the accumulation phase of life. They don't have any real complexity. They tend to be younger. They don't have that much money yet, but they're working toward it and we've given them a really easy low cost, low lift solution to begin to build wealth from 250,000 to a million. The next service tier up is called good advice. And yes, I have that trademarked and good advice is running on a backbone of altruist and a dedicated team of CFPs who onboards those clients, [00:26:00] creates what is often their first financial plans with them and is there to help them with an entire range of issues that may come up.

 

Josh (00:26:09):

They tend to still be in the accumulation phase, but we look at that as the farm team. The person who starts with us with half a million, it's not gonna be long before they get to a million. Through some combination of increasingly adding money to their account each month automated connected to their bank, but also market appreciation and their salaries are going up. We look at that as, [00:26:30] okay, this person's at a half a million now. We're not gonna wait till they're at 1.3 to start helping them. We're gonna set things up for them the right way today and those people are gonna be our future flagship clients. Which brings me to the next service tier. Flagship is one to 7 million. This is where the origin of the firm started in this tier. At that tier, you have a dedicated financial planner, somebody who hopefully is going to be with you for life, someone who gets to know your family, your spouse, your [00:27:00] kids, maybe even your own parents, somebody that gets to know the intricacies of your business.

 

Josh (00:27:05):

And at that tier we're doing tax consulting, business finance, planning, et cetera, everything that you could possibly need from 7 million up to 25 million as a service tier called the preserve. This is where at this point we know you're not spending all your money down. We're no longer talking about your own retirement. Now we're talking about the next generation. And so that brings entirely new levels of complexity [00:27:30] and a lot more service from your dedicated financial planner at that tier. And then 25 million and above is something relatively new for us in the last few years. We've begun to get interest from people with 50 million, a hundred million. We have two billionaires as clients right now. So that's the multifamily office tier. We've hired dedicated legal, dedicated trust and estate experts and we're building that out right now and really excited about that as sort of the next big [00:28:00] adventure for the firm. We're winning a lot more business at that level than I ever thought we would 10 years ago. It wasn't even on the radar.

 

Jonathan (00:28:08):

I just wanna shift gears a little bit, talk about how you two work together. You guys obviously on the show have a fantastic dynamic. It's just funny and you give each other shit. It's a lot of fun to watch. How do you guys work together? What makes it work?

 

Josh (00:28:22):

I'll tell you how.

 

Michael (00:28:22):

Like peanut butter and jelly,

 

Josh (00:28:24):

I say something in a text or on slack and he immediately assumes the tone of voice [00:28:30] that I'm saying it in is the worst possible version of me.

 

Michael (00:28:33):

Josh is a keyboard warrior who likes to yell up during text and then when you call him, he's like, what do you mean? I didn't say that? That's not how he meant it.

 

Josh (00:28:41):

No, I did say that. I didn't say it like that.

 

Michael (00:28:43):

Okay.

 

Josh (00:28:44):

Is what I'll often say.

 

Michael (00:28:45):

This is how we work

 

Jonathan (00:28:47):

And how you, I mean, Josh goes on CNBC. It's

 

Josh (00:28:49):

A division of labor. I have my domain, Michael is his, we have another partner named Chris who's terrible on camera, which is why he's not here today. And then we found in the firm, originally [00:29:00] Barry was more involved than he is today on like a day-to-day basis. But we would look at how do we get through the day? How do we get through the week, how do we get through the quarter? And if we were lucky, if there was five minutes left over, we would talk about next year's goals. That was the early days. Let's just get through the day now. Of course we have more people working for us. We have 80 some odd people. We have the luxury of being able to think a little bit longer into the future, and we have people every day who focus [00:29:30] on getting the firm through the day. So the way that we work together is a lot of delegation to outstanding employees that we've attracted through the years and nurtured and watch them grow. There are areas where we all have to collaborate at the top and make big decisions, and I think we know each other pretty well and I think we have a pretty good sense of the right way to frame things for each other. I don't know. For some reason it's a good vibe. It works well. Doesn't mean there's not disagreements along the way.

 

Michael (00:29:58):

Jonathan, you've worked with your father.

 

Josh (00:30:00):

[00:30:00] That sounds harder than this.

 

Michael (00:30:02):

I'm sure that you have a personal relationship with your father and I'm sure that you have a business relationship with your father. It's not too dissimilar from Josh and I. Partnerships are tricky and complicated, but what we've built, we've been doing this for almost 14 years. It works extraordinarily well because of some of the times where it doesn't work. But I love Josh dearly and he knows this. He saved my life from a very, very bad place. And I am over the moon excited and grateful that I get to do this with him. Aw,

 

Jonathan (00:30:27):

But how do you go from that? [00:30:30] That doesn't help in a business sense.

 

Michael (00:30:33):

I curse him a lot too. Yeah,

 

Josh (00:30:34):

Listen, we have disagreements, but the thing is that we all are better off getting along and working those disagreements out. None of us thinks on their own, they would do a better job than we do. I'm just saying like we, it's not just Michael and I making all the decisions. We have an inner circle. No one in that inner circle is like, I'd be way better off leaving and doing this on my own. We all get [00:31:00] that. The power of this thing is us together. Once you get past 50 employees, the entire day is about managing people. Everything is problems all the time because people are complicated, meaty people are people. So most of the problems in this business, and I would imagine most businesses are people problems. We don't have like, oh no, there's a tornado coming. We don't have problems like that. We have problems that are like any business, the people who work there taking [00:31:30] care of the clients, making sure people are on the same page, who are working on projects together, making sure that when we're making a management decision that there's buy-in and everyone understands there's nobody in that process that's like, ah, I don't need you guys.

 

Josh (00:31:46):

I could do this myself. Nobody thinks that. And that is the key to holding it together.

 

Jonathan (00:31:50):

So Josh, a specific example, you're on CNBC one or two days a week, you're pitching stocks. How do you and Michael collaborate on that? What's the couple days before? How do you decide what [00:32:00] you're gonna talk about when you're not talking about Fukushima or whatever the disaster that they make you talk about? So

 

Josh (00:32:06):

I'll typically ask Michael what he thinks and then on air I will go the other way. Let's take a nice check.

 

Michael (00:32:12):

When I started with Josh, it was 2012 and my first day with him, he told me to give him notes for CNBC and I could not believe it. Literally my first day. And I remember saying like Blackberry research in motion was down six of the last seven days and Josh read it on TV and I couldn't [00:32:30] believe what had just happened.

 

Josh (00:32:32):

I will literally read anything that's put in front of me

 

Michael (00:32:35):

He's like, Ron Burgundy. I did that for him and it was a pleasure for the, and it made me a much better thinker and investor and writer, whatever. I did that probably until when did Sean step in 2021? Maybe I did it for a long time.

 

Josh (00:32:49):

Here's the thing about CNBC, basically. I'm not gonna say I remade the show in my image or anything like that, but I was the only person working in wealth management who was on the show. [00:33:00] Everyone else on the show, they were either like a chief strategist at a brokerage firm, an options trader, a hedge fund manager or like a money manager, asset management mutual fund family or something. There were no financial advisors. Now the entire show is people working in wealth and that whole thing happened during my tenure. I watched it one after another. I would watch these people leave a hedge fund and go to wealth management or leave a broker dealer and go to wealth management or leave an asset [00:33:30] manager like TIA CREF and go to a big wealth management platform. So one after another. Every single person now with two exceptions is in the RIA world.

 

Josh (00:33:40):

All of them. Jim Leventhal, Stephanie Link one after another. They're all in wealth. The RIA side of the wealth management business has a gravitational poll all its own because it is literally the best business on Wall Street. I don't mean best like it's the most profitable, [00:34:00] although it's highly profitable. It's the least subject to the boom and bust cycles compared to say, hedge funds which come into favor, go out of favor, come back, go back out. Trading Wall Street firms get almost no multiple on their earnings for their trading profits because the investors just assume next quarter they'll get fucking destroyed. Say, all right, you had a great quarter trading. We don't care. We're assigning no multiple to those earnings. Fixed income currency, commodity investment banking, m and [00:34:30] a IPOs. These are incredibly cyclical things. They come in favor and then they disappear. You can go five years without an IPO.

 

Josh (00:34:40):

Wealth is different in the financial crisis. The people running these investment banks, they looked around at all these different businesses that they had. They said like, what's the one business that we can set our watch by that has this consistent fees being paid all the time. No matter what the market's doing, the clients don't abandon it. [00:35:00] The people who work there don't disappear. The investments don't blow up it's wealth. That's why you saw Morgan Stanley do a joint venture with Citi to ultimately swallow up a third of Smith Barney, then another third, then the whole thing. This is the best business in the industry and that's why you've seen Goldman and that's why you've seen Merrill Lynch. They've all transitioned from these transactional businesses and brokerages into wealth management companies.

 

Jonathan (00:35:30):

[00:35:30] I'm not saying you're wrong, but since 2009 to today we're, this is May of 2026, the stock market with few exception has gone up into the right. Is it really a great business or is it just granted a large moment in time, but a a moment in time?

 

Josh (00:35:45):

It's easy to say that now, but in the heat of the moment, in a year like 2022 when the 60 40 portfolio has its worst year in a hundred years, it's not quite that simple. I think what the wealth business is able to do is [00:36:00] deliver high profitability and organic growth at the same time on a very, very large scale. Trillions and trillions of dollars. So in a bull market environment like this one, JP Morgan and Goldman Sachs and Morgan Stanley are making a ton of money on deal flow. There's a ton of capital formation. They're raising money to build data centers. They're taking semiconductor companies public with a hundred billion dollar valuations outta the gate. It's incredible. That's [00:36:30] way more profitable than wealth right now in a bad market environment. All of those things can go away. And what we do will continue because people's retirements and their financial needs do not ebb and flow with the pace of the economy.

 

Josh (00:36:49):

If you're 65, it doesn't fucking matter what GDP is. You need to start pulling money outta your account and you need help arranging your investments in such a way that you can. We became the best [00:37:00] business on Wall Street. Every single person who I started on the air with who was doing options brokerage or chief strategist or whatever, they're all now in the RIA space one after another. Some of them I got them their jobs or I made the introductions to the person who hired them. That's been the evolution. A lot of people are like, oh, why is there a financial advisor on halftime report 15 years ago, you got these guys trading like call options, put options. Here's my lock of the day. The world [00:37:30] has evolved, the show has evolved and everyone came around to where our firm already was. We were very early. We helped to shape it. Our blog posts were extremely influential on all of the people in the industry and the people who have come in since I'm proud of that and I think it actually is good for the end investor that the world has evolved in our direction.

 

Jonathan (00:37:53):

You started a really unique moment in time. Twitter was blowing up. Now it's kind of a joke on finance, [00:38:00] stock market stuff, blogs were coming into Vogue. All of these great think you had the wind at your back not to take anything away from what you did because it was very difficult to do it. Could someone do that now? Is there a way for someone to create the trust that you built from let's say 2008 to today? Obviously it'll take a long time and what would be the best way for them to do it?

 

Josh (00:38:23):

I would say yes, but you could do it, but you're probably gonna do it as a solo act at first. [00:38:30] And then you have to get lucky and have people join you who can help augment your voice in the media and build that audience. And I have Michael and I have Ben Carlson and I have Blair Duke and a, and I have Callie Cox and I have Barry and Nick Majuli and Todd. These are people that are writing every week speaking, making appearances. They'll all work at the same firm. Is anyone gonna do that? I don't [00:39:00] see how, because think about the egos involved and the fights over ownership. So we have something really special. We have this association of great voices and content creators and people who want to collaborate with each other. I don't know anyone that can do that. That being said, there are incredibly talented RIA founders who are building big audiences on YouTube who are building big presences on social media.

 

Jonathan (00:39:27):

What social channels would you use if [00:39:30] you were starting today?

 

Josh (00:39:31):

Today I would be all LinkedIn and YouTube.

 

Jonathan (00:39:34):

Why LinkedIn?

 

Josh (00:39:35):

It's where people that have money and care about their career and their finances are, there's no pseudonymous accounts. Somebody's on there. They're on there as themself. Get away from the cesspool aspect of some of these social media platforms that just let anybody say whatever they want and hide like little bitches on LinkedIn, you wouldn't act like a psychopath because you're doing it under your real name [00:40:00] and in many cases your actions are connected directly with the company you work for.

 

Michael (00:40:04):

One of the things that Josh said that's really important is he said, there are a lot of REA creators, founders that are putting content out into the world. You need to have a real business or a real source of income in order to do content because the amount of time it takes to build an audience, especially today when building an audience is really difficult. And then to monetize that audience, it takes years. [00:40:30] And you could be doing this for two, three years with zero payoff. So how do you pay your bills in the meantime? So if you are just going to be a content creator with no base, it's extraordinarily difficult. But if you already have a business, hard but doable,

 

Josh (00:40:48):

The formula is start somewhere where you are not gonna be the 500th person saying the same thing. So for a lot of people, that's a niche. So you start a Substack, [00:41:00] I write on beehive, but whatever. Same kind of idea. Let's say Substack because people understand it was WordPress when we started blogging, but now it's Substack. Start a Substack focus on something that is nichey enough that you can own it, but not so niche that nobody gives a shit and have that be the starting point and then go broader from there. Most people go the other way. They just talk about everything under the sun. They're not experts in any of it. They're too broad. They don't know [00:41:30] who they're trying to reach and as a result, they never get traction. They're a me too. They're the 5000th person saying some version of the same thing. Like imagine like I'm gonna go on Substack and write about the Fed. What are you a moron? <Laugh>. <Laugh>. I hope you're a former Fed governor because otherwise nobody gives a shit what you say. Whereas if you say, I'm a financial planner and my practice is people in the hospitality industry, I work with hoteliers, restaurant owners, [00:42:00] event planners, own it, take it over, have the name of the blog, be something associated with that and become the acknowledged expert person who speaks to financial planning issues relevant to somebody that owns a chain of 30 restaurants, become the girl or the guy that is the starting point.

 

Jonathan (00:42:21):

But how do you keep that great content and then translate it to actually ring a cash register? Like how does that happen?

 

Josh (00:42:28):

Because you become [00:42:30] the acknowledged authority for the people living in that world and they know each other and they tell each other about you and they have events and you go to those events and you become a speaker and all of a sudden you are in the orbit of all of the people that you have become an expert in serving. And there are other financial advisors who could help these people, but none of them understand the real challenges and issues that they face. The way that you do now [00:43:00] you have a niche, you'll attract other people who are interested in serving that audience. They become part of your mission. Find a way where they fit in, maybe they own some equity. You have a business and then all of a sudden you can expand, you can broaden, you can go concentric circles from throwing a pebble in the pond.

 

Josh (00:43:20):

Everybody does this backwards. They say, I want to be Barry Ritholtz. I wanna go out and talk about the economy, the market, outer space, this, that the other people are [00:43:30] not willing to dominate a niche and expand outward. They like I am a thought leader on Wall Street. I have comments on IPOs, I have comments on semiconductors and memory stocks and I could talk about Goldman Sachs and I could talk about Berkshire and I could talking about Boeing. I'm trying to find the words for it. How on earth are you gonna build an audience doing that? It's so broad. It's so general. Number one, you can't be the expert on all those things. And number two, even if [00:44:00] you could, there are so many other people doing the same thing that it's hard to even get heard. My advice to people who really wanna do the things that we've done, I had a very specific niche.

 

Josh (00:44:12):

I wrote about conflicts in the broker dealer industry as it relates to the client population who are being served by brokers. I wrote about it every single day. Anytime there was an article about a fine being paid or a disciplinary action [00:44:30] or a rule change, I was the guy, I was all over it. The Wall Street Journal would do stories about bad brokerage firms or whatever. I was the first call I was mentioning, I don't do that anymore. I changed the name of the blog. It's not even called the Reformed Broker anymore. 'cause I started there. I knew about it, I lived it. I fucking lived it. But then over time I learned more about different subjects. I was able to speak confidently about so many other things and now [00:45:00] I don't even call the block then anymore. It's over. I outgrew it. This is the opportunity. If you're creative and energetic and curious and confident, you can do what I did.

 

Michael (00:45:14):

Jonathan, if you're asking for a friend, we could talk offline. <Laugh>

 

Jonathan (00:45:18):

Michael, I wanna get back to your book. I read it yesterday, I loved it. It's a great book. Big Mistakes. By the way, Josh, I went on Amazon to get your book, the physical copy. There's one left.

 

Josh (00:45:30):

[00:45:30] You got it. You snagged it.

 

Jonathan (00:45:32):

I did Kindle piece. It would take too long to get there. Mike. I think there's two left of yours. So I got Kindle. A big mistake. One of the things I really like about, it's short right to the point. You don't have to read the whole thing. The theme is talking instead of a how to book is like how really successful people screwed up and how it why and the lessons learned. And I think you did a great job. One of the things you talked about, and it was with reference to Bill Ackman and Herbalife, is be really careful about talking [00:46:00] publicly or even to friends about your stock or your investments as someone who has to do that to promote their business. What are things that I can do to kind of ground myself and I don't get too anchored to, you know, one's thesis. Well, listen, I love Uber. I think it's a great stock. I think it's worth $133 from here and it's $75, but I may be wrong and I need to be able to be able to say that to people If I am wrong,

 

Michael (00:46:29):

Man, this [00:46:30] is something that I haven't seen done successfully.

 

Jonathan (00:46:33):

My mom says I'm unique

 

Michael (00:46:36):

Putting out a thesis into the universe with your name on it, your blood, sweat and tears on it and defending the thesis and then admitting defeat. That is what you are supposed to do. Okay? That fake Cains quote about when the facts change, I changed my mind. What do you do, sir? But people don't like when people change their minds, especially when they followed you and they followed you into [00:47:00] a stock at a hundred because you had a thesis and that's $70 or at $60 or at $40, you changed your mind. It's like, oh, thanks a lot, asshole. That's really hard to do. So I would be curious how you do it, but it is the appropriate thing. It's like, listen, I bought this stock because this reason I was wrong. This reason did not come to fruition and now I'm gone. The problem is by definition, by the time your thesis has been proven wrong, you're down a lot of money. And that's hard because this idea that you're going to [00:47:30] sell at the bottom is in the back of everybody's brain who has ever taken a loss on a stock and that fear keeps you in usually for way too long. That's a tough needle of threat. But the people that I admire are the ones that shoot you straight and say, yeah, I was wrong. Guess what? That's what this business is. You're wrong just as often as you're right. So you own it and you move on.

 

Josh (00:47:55):

In the book about Jim Simons that was written a couple of years ago, [00:48:00] the Man Who Something Markets, what was it called? Solved the Man Who Solved Markets.

 

Jonathan (00:48:04):

There's another moon book, right? I think,

 

Michael (00:48:06):

Yeah.

 

Josh (00:48:07):

The craziest stat from the book is I think Simons himself estimated that they were only profitable on 51% of all their trades or something. I have to like find the exact stat. Maybe I'm saying it wrong, but almost half the time, whatever they were trading the trade was wrong,

 

Jonathan (00:48:24):

But they know how to size it up when they really have high confidence. I guess

 

Josh (00:48:28):

I can't speak to that, but I think the [00:48:30] point is, anyone who acts like this is a batting average business is like a schmuck on wheels. Because what the game has always been about is how much do you make when you're right and how much do you lose when you're wrong and not outta 10 flips of the coin. How many times is it heads? That's not what we do. That's not what investing is. I wish it were so simple. It's not about the probability of every call you make turning out. Well, I think people don't understand that. The other thing is talking [00:49:00] about stocks publicly. I've been doing it for 15 years, so don't listen to me, but you're almost better off putting a gun in your mouth. Number one, you might say you like a stock at a hundred, then something happens that falls to 90, you sell it, it ends up at 50.

 

Josh (00:49:15):

The person didn't hear that you sold it at 90. They just know that they bought it. Maybe they didn't hear you the day you sold it, and then in their eyes you cost them half their money. There's also no conversation at all about position sizing anywhere in public, not [00:49:30] on Twitter, not on seeking Alpha, not on CNBC can't express to people, this is high conviction, this is low conviction. I'm putting 1% of my portfolio into a rocket ship stock, literally betting on rockets. It's not half my portfolio. I think the way to do it is to say, this is my opinion. This is what I myself am doing. I don't want you to do it. I don't care if you do it or not. If you take action based on [00:50:00] what I'm saying, don't act like you paid me for advice. 'cause I'm not getting money from you. I'm not telling you to do it. You are listening to my opinion and taking action on it. I'm flattered. I appreciate it. I'm not telling you you should do that. I'm not telling you how much of your money you should do it with, and I'm not gonna hold your hand through the end of the trade. I may change my mind at some point. I think this today, I thought the pistons were awesome 10 days ago.

 

Michael (00:50:28):

Same.

 

Josh (00:50:29):

Now I think they're trash.

 

Michael (00:50:30):

[00:50:30] Same

 

Josh (00:50:31):

I reserve the right for events to allow me to change my mind. I think the best way to frame it for people who are listening to your opinions, this is my opinion today, not forever. I'll probably change my mind, may change it and change it back. And this is not advice for you. This is what I myself am doing with my own capital.

 

Jonathan (00:50:50):

It's interesting. Josh, you're also now gonna be actively managing some money. I love the name. You want something called porterhouse Michael, I'm sure you're involved with this too. Can [00:51:00] you just tell us a little bit about it?

 

Josh (00:51:02):

So to clear that up, I will be less involved than Michael will. One of Michael's roles at the firm, in addition to being managing partner, is heading up research, serving on the investment committee and interacting with all of our asset managers. The two of us are not sitting with suspenders on listening to conference calls and buying and selling stocks.

 

Michael (00:51:24):

I don't wear suspenders when I listen to conference calls. For the record, I do listen.

 

Josh (00:51:27):

I wish we were talented enough to do that. We've built [00:51:30] a rules-based strategy that's run quantitatively with our partners at Franklin Templeton and Porter House basically encapsulates some of the biggest ideas that I've come across in my time in the markets about what actually works and how to protect risk, et cetera. And what we wanted to do was turn that into a rules-based approach to managing a very specific sleeve of our client's portfolios. Porterhouse is that

 

Jonathan (00:51:58):

And why the name Porterhouse?

 

Josh (00:52:00):

[00:52:00] Because it represents the premium cuts of the market.

 

Jonathan (00:52:05):

Why

 

Josh (00:52:05):

Not

 

Jonathan (00:52:06):

Wagyu

 

Josh (00:52:07):

Wagyu is a type of cattle. It's the way that that specific cattle is raised. You could have a Wagyu porterhouse or a non Wagyu porterhouse.

 

Michael (00:52:16):

John, don't step to him on food or especially steak. Okay?

 

Josh (00:52:20):

Wagyu is basically Australia's attempt to replicate the Kobe beef process from Japan. And we have American Wagyu now and [00:52:30] I love it. But that is literally the way that they massage the cow and feed it and they're looking for a certain marbleization of fat content. That's not what porterhouse is. Porterhouse is literally the best cut of the entire opportunity set. The porterhouse steak, it's a T-bone. It's got the New York strip on one side, the filet on the other. It's literally the perfect version of a steak that you could possibly ask for. And most of the finest steak houses around the world, their [00:53:00] signature dish, if it's not a bone and tomahawk, it's gonna be the porterhouse. I think most people would acknowledge that is the premium cut. That's what we're doing with this portfolio. We're looking for the best stocks, both fundamentally and technically, and we wanna own them at the right time and we want to exit them at the right time. Easier said than done. That's the goal of this strategy. It's very concentrated, will not be a static number of names. It'll be highly reactive to the market environment at any given moment, but the rules-based aspect [00:53:30] of it is why it fits with our overall investing philosophy. There are times when I'll look at the holdings and I'll say, rip that out of there, but that's not what we're doing.

 

Jonathan (00:53:40):

Michael, what percent of the portfolio should this be?

 

Michael (00:53:43):

Conservatively, like 140.

 

Jonathan (00:53:45):

There you go. Well, you're in an ness.

 

Michael (00:53:47):

You want to get doubly long. Depends on the investor type, but this is a satellite position, so whatever that means to you. That's what I would think porterhouse should represent. One of the reasons why I personally love porterhouse [00:54:00] so much, not the stake of the strategy, and listen, we are in a historic momentum run. Okay, that is not lost on me, but when we started building this strategy, it was in the winter. We had no idea what was coming. Forget the current market environment aside, one of the things about the stock market is that especially individual stocks, there's always a reason to buy and there's always a reason to sell. People tinker too much of their portfolio, and I am so guilty of this with individual stocks. I get scared. I get greedy at the wrong times like everybody else. [00:54:30] The systematic nature of what we're doing here, the algorithm doesn't know what it feels like to have a stock that doubled and then doubled again, if it is going up, if it has not violated our exit rules, either on the technical or the fundamental side, we will continue to own it. Guess what? If a stock went from 500 to a thousand, I'm not buying it at a thousand and I'm definitely not holding it to 3000. But that is by definition the way that the best stocks work. Yeah,

 

Josh (00:54:55):

People can't do this. The biggest thing is that anybody could see a stock fall from a hundred [00:55:00] to 70 if they're a value investor and say, okay, I feel like there's a margin of safety. All the multiples come out. I'm comfortable buying it here. And maybe it works, maybe it doesn't. It just depends on the stock. The thing that Michael just pointed out is what nobody can do. Nobody could buy a stock at 50 and still be long at 500.

 

Jonathan (00:55:18):

It's very, very D though.

 

Michael (00:55:19):

You don't even buy the stock at 75. If it was just 50, you feel like you missed it.

 

Jonathan (00:55:24):

That was with me last year at Google when it hit, I was buying it at one 70 and then it hit two 20. Yeah,

 

Michael (00:55:29):

I missed it.

 

Josh (00:55:30):

[00:55:30] So the potential drawback of the way that we're doing this in a rules-based disciplined way, the potential drawback is there are gonna be a couple of names in this portfolio that are five Xs and 10 Xs. We may not be able to stay in them the entire time, or even if we can, we'll look at it and be like, wait, we only own 7% of that. We should have owned 20%. It was so obvious that's gonna happen, but there's discipline in the way that we're allocating and there's cell discipline too. [00:56:00] So that'll cause us to miss some big opportunities because you have to have rules around what you're doing.

 

Jonathan (00:56:06):

Do you think people are less disciplined now with zero commission trading?

 

Michael (00:56:09):

Oh yeah.

 

Jonathan (00:56:10):

Was it a disservice to investors?

 

Michael (00:56:12):

Ooh, that's a loaded question.

 

Josh (00:56:14):

Not really. I owned stocks for 20 years and the fact that I could sell them commission free hasn't compelled me to sell them.

 

Michael (00:56:21):

But this is the point. Whenever you're talking about big questions like that, was this x, Y, Z for investors? Which investors are you talking about?

 

Josh (00:56:29):

Yeah, [00:56:30] traders.

 

Michael (00:56:30):

Because was it bad for the people that focus on the next week? Yeah. Day traders lose money. The more you trade, the worse you do. We know that. But to Josh's point, it's not impacting how he trades. So for investors, you have to specify which investors you're talking about,

 

Josh (00:56:43):

Right? I just think it's like on a per person basis, was the invention of ice cream bad for humanity? No. Ice cream is delicious. Is there 5% of the population that literally can't stop eating Ben and Jerry's? Yeah. Just because you remove the barrier to trading, [00:57:00] the financial barrier to trading doesn't mean that you're gonna make everybody behave badly. Will you be encouraging some people with giving them the availability of leverage and different options, products right in their face? Yeah. It's probably not great for everyone, but what are we gonna do? Hold back progress.

 

Jonathan (00:57:18):

You guys have been unbelievably successful because of Ritholtz.

 

Michael (00:57:23):

Actually, Jonathan, Ritholtz has been unbelievably successful because of us.

 

Jonathan (00:57:27):

I like the way you're saying that. I like that. And [00:57:30] Josh, you mentioned you know your own individual stocks. Has the way either of you invested changed since you became more successful?

 

Michael (00:57:37):

Yeah.

 

Jonathan (00:57:38):

How?

 

Josh (00:57:39):

Think so.

 

Michael (00:57:40):

I used to not have a portfolio.

 

Jonathan (00:57:41):

Fair enough.

 

Michael (00:57:45):

So there's that <laugh>. So with the launch of Porterhouse, listen, I love picking stocks. It keeps my brain sharp. We deliver content to the audience. We talk a lot about stocks. I can't not do it, so I get a lot of satisfaction, but it's for the content. If [00:58:00] I wasn't doing a podcast, would I be picking individual stocks? I don't know. Maybe I would. Probably not to the extent that I am, but it is a much smaller portion of my portfolio now because I want more of my money going to Porter House and the other strategies that we employ for clients,

 

Jonathan (00:58:14):

Joshua, about yourself.

 

Josh (00:58:15):

My retirement portfolio is in the same models we run for clients. Our employee 401k is in the same models we run for clients. Everything that we say about us, international, small, mid large, we do the same thing. [00:58:30] But I love the stock market. It's actually one of my favorite things in the world. I fell in love with the stock market in 1996.

 

Jonathan (00:58:38):

Why?

 

Josh (00:58:38):

My first job, I was cold calling at a brokerage firm in Manhattan. I was 19. It was like the summer in between freshman and sophomore year at college, and I got a job working in some gigantic full floor boardroom on Third Avenue and 53rd Street, and I got on like a 6:00 AM train or something to get there by seven 30, pull [00:59:00] into Penn Station and then literally walk across Manhattan to get to the fifties and third avenue and line up and walk in the room. They would flip the lights on, they would point to a phone. They would give me a stack of index cards and say, okay, get a few of these people to talk to your senior broker today. And the TVs were all around the room. There were IPOs happening. I watched them take Snapple public that summer and Boston Chicken and Callaway Golf and [00:59:30] Netscape.

 

Josh (00:59:32):

I just watched that whole moment in time, that mid nineties before the bubble. I watched that sliver of time. People were talking about a OL. I didn't really know what it was, America Online. I had no idea that moment in time, everything was happening in 96, 97, 98, leading up to what would eventually become a bubble. The Pam and Tommy Tape buying my first thing on Amazon, and then seeing that Amazon was gonna come public and it would be an IPO and [01:00:00] you could invest in it. Like I just fell in love with the markets and capital formation and being able to take part in it. It's never gonna go away. I'm never not gonna be involved with stocks. I take bigger risks for myself.

 

Jonathan (01:00:13):

How did 2000 not break you in terms of your love of the stock already?

 

Josh (01:00:17):

That's how I learned everything that I know now. I lost my whole portfolio. I was on margin. I was in a hundred percent tech. I was in a lot of recent IPOs with no earnings. How do you learn anything until you [01:00:30] get your ass kicked? Don't learn anything. You need to get beaten up, I think.

 

Jonathan (01:00:35):

Absolutely. But after, let's say the nifty 50 burst, there was 10 years where no one wanted anything to do with stocks.

 

Josh (01:00:41):

That's not what happened in 2003. We had a biotech rally. Risk finds a way. Jonathan, if I could tell you just one thing, it always comes back and risk finds a way. It's new leaders, new stocks, and back to porterhouse. One of the big ideas here is momentum [01:01:00] is a lot of fun until it reverses what actually happens a lot. Not always. There's this market wide event. Maybe it's a dip, maybe it's correction, maybe it's a crash out of the ashes of that. It's a new group of stocks that people can't wait to start buying again or buying for the first time ever. And you get new leadership and the way our strategy's been built is it's gonna de-risk after a 30% market crash. It's very likely to own almost no stocks. That's [01:01:30] not an expression of market timing. What it's doing is it's getting out of the stocks that are no longer working and it's building up a cash reserve so that as new leadership emerges, the money can get put to work and it may not be in the same stocks that it owned prior. So that's systematic. It's not us saying, here's the new leadership group. That new leadership group will emerge because risk finds a way.

 

Jonathan (01:01:52):

Michael, Josh, we've said it all.

 

Josh (01:01:54):

May have even said too much.

 

Jonathan (01:01:57):

I really appreciate your time. This has been [01:02:00] fantastic. Before I go, how can investor learn more about getting access to Ritholtz, getting access to porterhouse? Where do they go?

 

Josh (01:02:08):

Ritholtzwealth.com. We'll see you soon. Come one. Come all.

 

Jonathan (01:02:11):

Good luck tonight, Michael, with the Knicks. Very excited. Thank you all for being on the show.

 

Michael (01:02:17):

Thank

 

Josh (01:02:17):

You. Thank you, Jonathan.

 

Jonathan (01:02:21):

After Josh and Michael left, I kept coming back to my father's Howard Stern comparison. It was funny, but it turned out to be more than a joke. They built an [01:02:30] audience by being themselves candid, irreverent, and willing to say things. Most of Wall Street would rather leave unsaid, but underneath the humor is a serious wealth management business, a discipline process, and a culture that has become a magnet for clients and talent. Authenticity scales. That to me is the lesson. I hope you enjoyed the show. To be sure you never miss another World According To Boyar episode, please follow us on Twitter @boyarvalue. Until next time.

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About The Boyar Family Of Companies

Boyar Asset Management
We have been managing money since 1983 utilizing our proprietary in-house value-oriented equity strategies. We manage money for high net worth individuals and institutions via separately managed accounts. To find out how we can help you with your money management needs please click here.

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Since 1975 we have been producing independent research on intrinsically undervalued companies across the market capitalization spectrum and in a wide variety of industries using a business person’s approach to stock market investing. To find out how we can help you with your research needs please click here.