My Worst Investment Ever Podcast
Business:Investing
BIO: Mike Philbrick is the CEO of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership.
STORY: Mike learned of a mining stock at the urinal. He invested, and the stock performed well because the mining industry was on fire. And so encouraged by early success and massive ignorance, Mike wiped all of those gains in no time.
LEARNING: Don’t over-leverage. Understand what kind of investor you are. Ensure you have some protection before you go all-in in an investment.
“Just because you’re winning doesn’t mean you’re smart or you’re good at these things.”Mike Philbrick
Guest profile
Mike Philbrick is the Chief Executive Officer of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership. He has co-authored the book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad (Wiley), as well as several whitepapers and research focused on adding new insights to the quantitative global asset allocation space.
Adaptive Asset Allocation and Return Stacked Portfolio Solutions have been popularized by him and his team at ReSolve.
Preceding his investment career, Mike played professional football in the CFL, winning the Grey Cup Championship in 1999 and being inducted into the Hamilton Tiger-Cat Walk of Fame in 2015.
Worst investment everBack in the early 90s, there was a lot of mining going on in Canada, and so mining stocks were becoming popular. Mike had started noticing the stocks but had yet to invest. One day, he’s at a urinal, and a guy tells him about a particular mining stock. Mike figured it was a good idea to invest in the stock. He didn’t do any research; he just took the man’s word for it.
The stock wins, and Mike gets a couple more wins from the stock, not because he was a genius but because the mining industry was on fire. And so emboldened with early success and massive ignorance, Mike wiped all of those gains in no time.
Lessons learnedAlways remember that you don’t know as much as you think, so take different approaches such as diversifying, being less confident, managing risk with stop losses, or managing risk at the portfolio level on an ongoing basis. You don’t need to own more of what’s going well. Just do less of what’s dragging your portfolio from a momentum factor that enhances returns.
Mike’s recommendationsMike recommends his book Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Times – and Bad, which goes through steps that you would take to maximize diversification and how to use the factor of momentum to enhance that.
No.1 goal for the next 12 monthsMike’s number one goal for the next 12 months is to get his firm 1.5 billion dollars in assets under management.
Parting words“Stay true to yourself.”Mike Philbrick
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Connect with Mike Philbrick
Further reading mentioned
Jason Brown – You Never Go Broke Taking a Profit
ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments
Chris Vermeulen – Find What You’re Passionate About
Kenny Rose – Don’t Invest in Anything You’re Not Fully Educated In
ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
Chong Ser Jing – Pay Attention to What Drives Business Results
James M. Dahle – Don’t Buy More Insurance Than You Need
Harley Bassman – Sizing Is More Important Than Entry Level
Sam Burns – Understand What You’re Really Betting On
Jay Pelosky – You Can Be Right but at the Wrong Time
Reuben Mattinson – Have Solid Proof That Trading Is Happening and It’s Regulated
Jerry Parker – Understand Your Investing Capabilities and Limitations
ISMS 33: Fed Success! High LT Rates & Recession Coming
William Cohan – Get the Numbers Right Before You Invest
Neil Johnson – Take the Profit When You Can
Jeremy Deal – Use Differentiated Insight to Evaluate an Investment
William Bernstein – Never Invest Based on the Headlines
ISMS 32: 5 Signs of Impending Recession
ISMS 31: Global CPI saw 2nd MoM uptick in August
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