5 Steps to Creating Liberty through Investing Success & Prosperity

Hello and welcome. I'm Austin Root and welcome today to our presentation. I'm Chief Investment Officer at Stansberry Asset Management. On behalf of all of us at SAM, we want to thank you for joining us. With me today is Michael Joseph, Deputy Chief Investment Officer. Michael, thank you for being here. My pleasure. We have a lot to cover and we're excited about it. We're going to make great use of your time. Lots of things to talk about in the next hour or so. So with that, Michael, what do you say we just get rolling and get right to it? We got lots of covers. Let's do it. Fantastic. So let's start here. As you can see from this title slide, we're talking about creating liberty through the world. creating liberty through investing success and prosperity. You know, there is an there is an Oxford Club publication called Liberty Through Wealth. We're not affiliated with that in any way, and I'm not recommending you read it. I have read a couple of interesting articles from it from time to time. But I really like the name. I think it's poignant. I think it's pertinent, especially now. You see, I feel and you may feel as well that the world is getting a little less less free. Governments, less free. Governments, information giants, media giants are not only telling you how to act, but how to think. And for my money, that's making us feel, and you might feel as well, less free, potentially less free than your parents or even your grandparents felt. But there's an exception. If you have a large nest egg, if you have built wealth, you can create freedom. through that wealth creation. And so what we want to talk about today are the five mission critical steps to creating liberty and freedom and more independence, regaining your independence through investing success and prosperity. Now, first, we need to set the table and talk about how we got here. Why is it that investors need to take these steps to secure their financial freedom? Well, one of the big reasons is government. And so we thought we'd get started by talking and discussing the upcoming presidential election, what it could possibly mean for you and your investments. So for that piece of this, I wanted to bring in Michael, the stage is yours. Thanks, Austin. Yeah, we'll get things started looking at the upcoming election, what that could mean for the markets. And anytime you're wondering how an event could impact the market, it's a good idea to look at what's happened historically. And that's what we'll do on the next slide here. So what we're looking at is the average return during an election year going all the way back to 1950. And a few things jump out to me about this chart. For one thing, it's nicely positive, close to 8% on an average election year. That's more or less what you might expect from the market long term. So not a bad time to be an investor. You can also see in an election year, the first half of the year tends to be pretty dull. Not a lot happens on average. Now, that's not what happened this year. We're off to a really strong start. But what I really want to draw your attention to is the time period that we're at right now. So starting in September and then heading into October and November, as we get closer and closer to the election, historically, we've seen more downside volatility. Now, there's no guarantee that that will happen this year. But I think there's a strong possibility that it will. And I say that for two reasons. Number one, like I said, we're already off to a very strong start to the year, it would be perfectly natural and normal to have a correction to follow that up. And the second reason is like this time of year in an election year, this is when mainstream media makes their money through advertising, and they are strongly incentivized to do everything they can to keep eyeballs glued on the television screen. How do they do that? They say extreme things, they bring on extreme guests, they constantly flash breaking news alerts on the screen, and in general, they create an atmosphere of fear to keep people engaged to keep them hooked on the screen. And as people are fed that diet of fear, they get concerned, they get worried, they think, well, maybe I should sit things out until after there's more certainty and after the election. So that can absolutely trickle into the market. But look at what happens afterwards. Starting in November, right after the election, we get a pretty, pretty strong rally historically. Now, why is that? A lot of you will have heard the saying that the market hates uncertainty. When we get past the election, that uncertainty is removed. And yeah, we have half the country is happy about it, and half the country is not, but at least we know what we're dealing with. And the market can start to process it, and it moves on and moves forward. And that's historically what's happened. Now that's assuming that we have uncertainty in the run up to the election. Do we have that now? Let's take a look and see how things are shaping up. So starting with the presidential race, we're going to look at what the odds are. These are actually betting odds on the next slide. And we prefer to use that instead of polls because they've proven to be more accurate over time. So you can see they're about as even as you can get. It's pretty much a coin flip right now. According to the betting odds whether Trump or Harris will win. Not much more to say about this. It's a coin flip right now. That's not the case with the Senate, though. So we'll take a look at that. And there's 34 seats up for grabs for the Senate this year. Most of those are Democrat seats. And you'll see on the next slide that the Republicans are favored to win. Now, it's not a huge... Austin, can we move to the next slide, please? Moving on to the Senate race. The Republicans are favored to win the Senate, not by a huge majority, but pretty strong percentage chance that they come away with the Senate. So right now, Senate race is favoring Republicans. As far as the House race goes, I've termed it a toss-up. The model that we're showing you right here has Republicans with a 54% chance of winning the House. But there's a lot of undecided elections out there that could go either way. So we likely won't know until election night or shortly thereafter how the House goes. So based on all this, what can we take away besides that there's a lot of uncertainty about how things are going to go? Well, we can say that as of right now, the likelihood is that we'll either have a Republican sweep or we'll have gridlock, which means that neither party is in control of everything. Politics aside, I'll share with you that my preference as an investor, it tends to be to see gridlock. And I'll tell you why. When we have gridlock in the government, it usually prevents extreme legislation from getting passed, the kind of legislation that can impact the market. Now, when you have gridlock, you have more compromise. Those radical promises that you hear during the campaign trail, they tend to get watered down. At the end of the day, I just don't want the government meddling in the market that much. And we tend to achieve that through gridlock. However, if I don't get what I want, Austin, and we end up with one party controlling everything, history says we're going to be okay. Because when you look at when we've had unified governments, in other words, the Republicans are controlling everything, or the Democrats are controlling everything. Two things to say. One, returns have been pretty darn good. These are average annual returns during those periods. Two, this is one of those kind of head scratching things where you do a double take, the returns have actually been identical, whether we've had a unified Republican government, or unified Democrat government going all the way back to 1926. Small sample size, but it's an interesting point, for sure. It is. And I think the takeaway here is, no matter who's in power, the market tends to do just fine. And I certainly don't think that's because we always have wonderful politicians that are in power. But I think that speaks more to the idea that politicians do not control the stock market as much as they'd like you to believe. Now, maybe you accept that and you're okay with that. And you say to yourself, well, okay, I'm not going to make any wholesale changes based on what happens. But surely there must be some adjustments that should be made depending on who wins. And in hindsight, you're sure to be right about that. But the problem when it comes to politics, and what seems obvious and logical is they don't always add up. And a good example of that comes from the Biden campaign trail back in 2019. When he told the world, I guarantee you, we're going to end fossil fuel. Now, if you're a logic, logical investor, you see that it's perfectly reasonable to say to yourself, well, if Biden wins the presidency, which of course he did, there's no way that I'm going to invest in fossil fuel companies, he's saying that we're going to end them. But there's what politicians say, and then there's what happens. And what happened is that under Biden, US energy production has reached an all time high, we're producing more than Russia, we're producing more than Saudi Arabia, we're producing more than any country has ever produced. So, you know, maybe fossil fuels will see an end someday, but it certainly hasn't been under the Biden administration. What does that mean for investing? Yeah, I remember when Biden was elected, there was a lot of call for investing in things like solar panels and electric vehicle companies. And I'm hearing the same thing now, that's what you should do if Harris wins. But the reality is that while the S&P did pretty good under Biden, the 45% orange line that you see down there, the energy sector has more than doubled the S&P returns under the Biden administration. Again, not what you would think heading into that administration, but it just goes to show you the obvious, you know, in quotes, obvious picks based on who wins, don't always work out how you might expect. And Michael, I think the flip side of that is, yeah, solar and EV stocks did better, have did better under Trump, and they've done under Biden, isn't that right? Massively, they did massively. And you wouldn't have expected that either. Not at all. That's not what the pundits were calling for. And it, it just isn't, isn't logically what you might expect. But it's, it's absolutely what happened. So there's plenty that we aren't sure about. We don't know who's going to win the election. And even if we did, as I mentioned, it's not clear how you should invest, even the obvious things don't always work out. But there are some things that we have a high certainty about. And those are the type of things that we want to base our thinking on and make investment decisions on. And so what do we know for sure? Well, unfortunately, we're quite sure that the national debt is going to continue to increase, as we see it happens under every administration. Right now, we're at $35 trillion of debt. And Austin, you wrote a digest last week, you had a terrifying statistic in there, which is that it took our government 200 years to rack up their first trillion dollars of debt. Now we add a trillion dollars of debt, roughly every 100 days. This is mind boggling. And you know, this is a large number, but we do have a large economy. And if there was some sort of plan in place to address this debt, that would be one thing, but there really isn't. We don't think anything's going to change. We think that politicians will continue to kick the can down the road, and that this will be a problem that is not dealt with. We can see that in the deficit spending that we have today. Last year, we had $1.7 trillion deficit. This graphic that you see breaks down how that works out. We had $4.4 trillion in revenues, a big number to be sure. But 3.8 of that was wiped away in mandatory spending. That's things like Social Security and Medicare. By the time you get to discretionary spending, we're in deep deficit territory. And the biggest part of that discretionary spending is in our defense, which you could argue how discretionary that really is. It's pretty important. The takeaway is there's not an easy way around this with all the entitlements that are out there. This is projected to keep increasing. The projection for this year is a $2 trillion deficit or almost 7% of GDP. When you look at the times that we've had that much of a deficit relative to GDP, in the past, there's not many times. And they tend to stick out as pretty unique times. It happened during World War II. It happened during the Great Financial Crisis. And it happened briefly during the COVID pandemic when all the helicopter money was released. But we're not in a pandemic right now. We're not in a financial crisis. And we're not in a world war. Having this level of deficit during what's a relatively strong economy is concerning, and it's projected to continue. You can see that going forward, this is courtesy of the Congressional Budget Office. They are projecting the deficit to increase as a percentage of GDP. They have the primary deficit there flat, which I think is maybe generous. You can look historically and see it's never been flat, but we'll allow them that. What I think they hit spot on is the increase in net interest outlays. It makes sense. We're leaving a zero interest rate environment when some of that debt was funded. As it matures, they're going to have to refinance it at higher rates. And that interest is going to be a larger and larger percent of the deficit. It's not going to happen overnight. But we are confident it's gradually going to happen. And that's a concern. What else do we know with certainty? We're pretty sure that the yield you've been enjoying on your short-term cash is going away. The Fed is meeting next week. And the big debate among financial types is whether they're going to cut 25 or 50 basis points. We think much more important than that is the trajectory for rates going forward. We are entering, a timeframe when rates are going to be more accommodative. You can see that that orange dot there. That's the Fed's estimate of the neutral rate. In other words, where can the Fed funds rate be where it's not stimulating the economy, that it's not restrictive either? That's pretty much where they have license to cut to. And so that's a long ways from here. So whether it's 25 or 50 basis points of cut next week, we expect their rates will continue to go down. In the short term, that makes cash less and less appealing. What about in the long term? This is a chart going back over 100 years, looking at the purchasing power of a dollar. And you can see that with few exceptions, the dollar tends to lose value. We think that's going to continue to happen. Think back to that debt chart that I showed you with debt skyrocketing. The easiest way for politicians to ease that burden is, a lot of you already know, it's to go to the printing presses and print more money. And the more they do that, the more the dollar, is devalued. So thinking about what we know for sure, what can you do? For most of you, if you're looking to achieve financial liberty, you can't hang out in cash. It's the charts right there for you. And we don't think it's going to get better. Cash loses purchasing power over time. Unfortunately, you can't rely on the government to do what's going to be best for you. I hate to say it, but look at what they've done to our own national finances. $35 trillion in debt, adding a trillion dollars every hundred days. Okay. You have to take matters into your own hands. You have to have a proactive plan to address this. And we believe that that starts with the five steps that we've been mentioning. And Austin, I'm sure that folks by now are ready to hear what the heck are those steps that we keep alluding to. So I'll invite you to come back and share with folks what we're talking about. Fantastic. Thanks, Michael. That was great. Even with the technical difficulties, you nailed it. So thank you. So let's jump to that next slide. Look, our view is these are the five steps that every investor ought to take. No matter your current financial situation. Some you'll have to do immediately and then can get into the others. But we believe that these are what you need to do no matter who's elected, no matter where you're in life, and no matter what the market throws at us. So let's start with step one. Spend less, spend less, save more. You know, the only true guaranteed way to grow your mark, your wealth long term is to spend less than you make each year. So everyone you care about focus on first on yourself, but everyone you care about, you know, start saving now. Let's, if we think about investors, you really group them in, I think all investors and all, all of us, should be grouped into sort of four groups. The first one is, is, is, is, you know, Lena, Lina, Lena. I also actually have this as Lena, low earner, no assets, but it's our acronym for someone that is the most at risk in this current environment. When your dollar is being debased, when your purchasing power is being debased, and you do not have enough assets, to invest because you're, you're not generating enough income. Everyone needs to get themselves out of being a Lena, a Lena to next click a Henry. So Henry, at least you're generating, you are a high earner. You're not rich yet, but you're generating more capital per period than you're spending such that you can build on those assets. This is the first mission critical step. When you become an Arnie, when you have robust assets, even as long as they're robust enough, even if you're not earning enough income to cover your costs, you're in a better position. That's a lot of retirees find themselves in this position. And then if you're a Hela, well, gosh, you have high earnings and lots of assets. Even Hellas need to worry about being, taking a proactive approach to investing there. Their assets. But the goal for you and for everyone that you, that you care about is to just change this, this model a little bit. You need to be increasing your asset base by virtue of investing it wisely, which we'll get to later or spending less than you make. That is the first piece of this. Because again, we cannot rely on handouts from the government or in the purchasing power of your existing asset base to be protected. Next slide. So when we marry this concept of saving more, investing and then investing early with the idea of investing in a productive asset that will compound your investment asset base, at a high rate for a long period of time, something special happens. So let's, let's look at two examples here. Very quickly, Roger Rabbit is an investor that decides to invest nothing for the first 20 years of his working life. Then he invests a substantial amount, 1500 a month for the next 20 years. So he invests a total of, he saved and then invests a total of $360,000. Steady Eddie on the other hand, invests $500,000 a month for the first 30 years. Then nothing for the next 10. So he's invested $180,000 or half as much for over that full period. Over the whole 40 year period, they both earn an annualized 10% return. Roger Rabbit generates about a 3X. He triples his money, just about triples his money. Not bad. Steady Eddie, 17X his invested capital. So he's invested capital. So really this, this demonstrates the value of starting early and taking and enabling the benefit of productive assets to compound year over year over year. That's step one. Step two, understand where you are now. Before you start investing a single dollar, you need to take a holistic current assessment of your financial financial situation. Said differently. Said differently. To get to where you want to go, you first have to know where you are now. And the folks at Sam do a fantastic job of this. For those who don't know, Sam got founded with the idea that we could help folks invest better. And that was what they did for the first few years of Sam's existence. When I joined, you know, we as a team decided that we could do more for our clients, we could do more for them and help them with more of this. And that is really understanding their full financial picture, their full financial situation so that we could invest better for them. Next slide. We want to take advantage of our expertise in this regard. We'd love to schedule a complimentary review for you with a certified Sam, a financial planner, a Sam wealth manager. So in the Q&A box or in the Q&A box or in the comment box below, please raise your hand and let us know. Say, I would like to schedule a review and we'd be happy to do that. That's a mission critical part of your investing journey. Step three. So we've got assets to invest. We know where we want to go and where we're starting. Now we actually have to have a plan that's tailored for you. And that clear investment plan has three mission critical pieces to it. First, it's invested on the basis of your goals. We like to say at Sam that every investor has just three goals. Some combination of just three goals. They like to protect or maintain their wealth. They want to grow that wealth or they want to generate sturdy current income. So those are the financial goals. Some combination of those are yours. But every investor is also different on the basis of their risk tolerance and their investment time horizon. Some investors want to invest just for the next 10 years. Maybe that's the horizon that they think that is proven for them. Other investors, while maybe they're older in life, are not thinking about this capital for their life, but they're thinking about it for their children and their grandchildren's life. So have a much longer time horizon. Risk tolerance and time horizon are going to have a huge impact on how you invest, even if you have the same goals. So we like to think about the Sam's investment strategies across two vectors. One is, you know, what are your investment goals? We have these, these goals, our strategies are tailored and set up for what your goals are. We also want people to know that they're also, we want to want to want to see people to see, you know, them on a different vector. And that is risk version or risk tolerance. If you are more risk tolerant and you are focused on growing wealth, well, that's great. We have some great strategies for you. But again, if you want to protect your wealth and you're more, you want to sleep well at night, we've got strategies for you there as well. This is the meat of it. This is the meat of it. Four and five, really four, step four is the meat of it. And, and Michael alluded to my digest recently. If you read that, you know, this is, this is the, the, probably the counter consensus part of what we're trying to say. And that is that in order to protect your purchasing power, you need to be proactive. So even though you might have more of your portfolio, you feel like that you need to protect your assets and that's your ultimate goal. Even in that case, we believe that the core of your and every investor's portfolio should be focused on owning productive assets. Now, what do we mean by that? Productive assets are assets that generate value and cash flows for their owners. They will produce returns in excess of inflation, in excess of your cost of capital, and importantly, provide attractive risk adjusted returns. Said differently, we believe, while this may be counter to what some people feel, that if you're worried about the market, especially if you're worried about the world, your best defense and the way to protect your purchasing power is a good offense. So what, what do we mean by productive assets? Well, let me tell you a couple of things that we're talking about. One that we've identified that we think are really attractive for a number of investors are alternative investments. Investments that require, one of the ones that we like is private credit. I'll get to that in a second. But alternative investments, generally speaking, are less liquid. They can be more volatile if not done properly or not diversified properly. And they're less regulated. So the government wants investors in these to understand the risks and generally speaking, be wealthier. So for most of the, what we think are appropriate alternative investments, private equity, venture capital, hedge funds, private credit, private real estate, the way to really invest in these the right way is to be an accredited investor. And so that means, generally speaking, you're going to have a million or more of investable assets. Next slide. Next slide. Why add alternative assets? Why do we think these are good productive assets for, for you to, to add to your portfolio or for, for some investors add their portfolio? Well, it's this slide. So this slide, if you look at the, the X axis of this, so that the horizontal axis, this is the annualized volatility of certain mixes of portfolios. The Y axis of the Y axis of the up and down axis of the annualized returns. And so if you've, if you imagine the holy grail is to reduce your volatility, but increase your average annualized returns. So if you look at the dark blue, orange, and gray dots, these are various levels of mix between traditional equities and fixed income, generating a certain level of return and, relative volatility for those. Adding alternative investments over time has done one of these holy grail things where you've increased returns, but reduced volatility. Now, look, we'll be the first to say this is not a foolproof way, but at the right times in the market with the right alternative investments, we do believe that for investors that can allocate to these, that have a portion of their capital that can be in illiquid investments, alternatives make a lot of sense and provide a very productive asset. Next slide. Where do we like most? We like private credit right now. We like to say that private credit provides equity-like returns with a lot less risk. Now, here's a quote from Steve Schwarzman, CEO of Blackstone, my first boss. I was many, many rungs below him, but started at Blackstone, started my career at Blackstone. Here's a quote he recently had. If you can earn 12%, maybe 13% in senior secured debt, what else do you want to do in life? If you are living in a no growth economy and someone can give you 12%, 13% with almost no prospect of loss, that's about the best thing to do. Now, I put this quote up for three reasons. One, we absolutely agree. Two, I think it's interesting that Steve Schwarzman, Steve Schwarzman is the person who made this quote, since his largest part of his capital is private real estate and private equity and not private credit, but he still is talking against his book and saying, espousing the attributes of private credit in this environment. But number three is that the types of credit we're looking, private credit that we're looking to invest on behalf of our investors is distinct from what the mega banks like Blackstone and Apollo and Aries are doing. We are looking, hopefully, to generate returns in excess of 12% or 13% and do it in a much safer way. We'd like to talk with you about that. If you're an accredited investor, and you'd like to learn more about this, we're happy to tell you about it, but we can't talk to you about it unless you're an accredited investor. So again, if this is something that's of interest to you to learn more about, raise your hand or put it in the question box and we'll talk to you about that and happy to explain more of what we're doing there. But I think more important for the whole group, and frankly, this will be for the core of your portfolio, whether you're invested in private credit or not, is next slide. The power of compounding over long periods of time that is free and open to all investors is owning world-class stocks. We believe at the core of every investor's portfolio, you need to own those stocks that are capable of compounding their growth at a very high rate for a very long time. What types of companies are we talking about? Well, we're talking about companies that are capital-efficient businesses. That means that they generate attractive returns on the capital that they invest in to grow their business. They're durable, growing franchises. We believe there'll be bigger, better franchises in companies a decade from now than they are today. They produce attractive profit margins. And again, nice returns on investment. Importantly, this is very important. They're run by capable, effective, ethical leaders that have skin in the game. They're good capital allocators. Too many good businesses have actually been ruined by bad capital allocation decisions by the CEO. And then finally, look, this is important because the overall market is not this way. We need to see reasonable valuations. So with that. Austin, I know you were excited to talk venture growth. Do you want me to jump to that? Yeah, why don't we jump? Yeah, exactly. Why don't you talk? We have an income strategy that Michael helps run. I'd love for folks to talk about it. It has its full in part with a lot of those type of companies. Absolutely. So Austin, it just walked through the type of characteristics we look for in these productive assets. But of course, some of them are going to fit in better to one strategy versus another. So there are additional things that we look for. And of course, for our income strategy, one of the things we want to see is reliably generating income. Now, the way that most people gauge that is through dividend yield when it comes to stocks. And that's something that we certainly look at. But we take a broader approach to looking at all the different ways that companies can return capital to shareholders. And that's called shareholder yield. So we look at regular dividends. We also look at special dividends. We have companies that pay special dividends. Sometimes that's at the end of the year. Sometimes it's that they have a particularly good quarter. But we factor that in. We look at net debt reduction. And importantly, we also look at share buybacks. So these are the different ways that companies can return capital to shareholders. We care about all of them. Now, the number one question I get about the income portfolio is what does it yield? So we have that for you on this slide. As well as some comparisons. Starting at the far left, we have the S&P yielding not all that much, as you might expect. If you narrow it down to the dividend aristocrats within the S&P 500, those are companies that have every year consecutively raised their dividend over at least 25 years. You get a nice yield pickup there. The 10-year treasury is a stalwart in a lot of income portfolios yielding close to 4% these days. But the same income portfolio you can see there roughly triple the yield of the S&P. And this is just the dividend yield. If we had shareholder yield here, it'd be quite a bit higher. But that's the forward yield on the portfolio these days. Something that's missing here that you might have picked out is short-term treasury yields, which have been nice above 5%. As we talked about, we think that those days are coming to an end. So it's been a tough time, frankly, for some income investments, because if a stock is yielding 3% or 4%, well, if yields are zero, that looks pretty darn good. If you can get 5% in a three-month treasury, that's another story. So we think that the best days for this strategy, frankly, are ahead as yields start to come down. In treasuries, we think a lot of people will turn to the type of companies that we have in the income strategy to get a better yield. To give you an idea of the type of company that we look for in income, we wanted to talk about CRH as an example. Now, if we were in a room with folks in front of us, I would ask folks to raise their hand if they've ever heard of CRH Austin, because I have a feeling it's not a household name for everybody. But they are quite a large company and one of the biggest and best in their universe, which is they're a buildings materials company, third largest in the world. And they make and sell construction aggregates, hardscape and construction materials. So think pavers, fencing, pool decking. They're also one of the world's largest road builders, so very involved in infrastructure. You can see some of the numbers behind the stock. This is a growing company. They've grown at a 5% compounded annual growth rate over the last five years. We don't want a bunch of melting ice cubes in income. In other words, we don't want companies that are shrinking. We want them to be growing. Now, what have they done with that growth? A lot of it has been returned to shareholders, over a 9% shareholder yield. So this is a great example of why we care about shareholder yield and not just dividend yield. If you pull up the dividend yield of this company, it's around 1.6%. It's not terrible, but it's not super impressive either. But when you look at their net debt reduction, and more importantly for this company, the massive amount of share buybacks that they do, they return a heck of a lot of capital to shareholders. Management is very focused on shareholder returns. And we like to see that, especially in an income portfolio. The stock return speaks for itself. It's up over 200% over the last five years. How have they done that? Why is this such a productive asset? Well, they've transformed this company. Austin mentioned one of the characteristics we look for in productive assets are nice profit margins. This company has increased their margins every year for the last 10 years. The way they've done that is reposition the company. They used to essentially do what a lot of building materials company do. In short, sell rocks. In short, sell rocks. They've adjusted their strategy. They sell more value-added products now. And instead of just selling to customers, they've really become a partner. They offer consulting and integrated solutions for their customers. So they've really separated themselves from the average building material company. And they're able to charge more because of that. Last thing I'll mention about this company is they're based in Ireland, but they actually recently moved there. They're a primary listing to the New York Stock Exchange. So we think it's only a matter of time before this company joins the S&P 500. Might still not be a household name at that point, Austin, but they will get a lot more attention being in the S&P. And we think it's well-deserved. So that's our income strategy. Did you have something to add? Yeah, no, it's a great one, Michael. You know, we both think this is an interesting, I think it demonstrates that even though the dividend yield is very, very high at an income strategy, that's not just what we're looking for. We're looking for total shareholder yield. And again, growth on top of that. So we expect them to be able to grow both the yield and the buyback over time. And importantly, a point that I didn't really touch on, but they are a key beneficiary for a lot of the infrastructure spending that's going on and that we expect to last for years to come. So given that's the case, we do see more upside to come for CRH. Yeah, and we think this is a better business than some of its competitors like Martin Marietta and the like. And yet it trades at a massive discount to those. So great one. Let's keep rolling. Yeah. So what I wanted to talk about on the next slide was, really kind of two investment strategies we have, the one listed and then the forever strategy. So Sam forever strategy, if you think about it, we are trying to identify the world's best businesses that are the best businesses today that will continue to be the best businesses tomorrow. And that strategy has delivered for investors. Really excited about it. You know, Porter and I developed that strategy when I was director of research and head of portfolio. portfolio solutions at Stansberry research. We utilize Stansberry research to inform how we invest, but I should say that we are a wholly independent company. We utilize and optimize Stansberry research, but Michael and I and the rest of the team ultimately make the investment cases based on our own research as well. So forever portfolio, world's best businesses today that we think importantly will be world's best businesses tomorrow. Venture growth has some of those businesses, but also has businesses that we believe will be the world's best tomorrow that aren't there yet today and have been undiscovered by the market. But importantly, they're well run. They have all these attributes that we like. And importantly, they're embracing secular trend and innovations and consumer demand. Oftentimes we can be earlier in that investment cycle. It's investing in CRH 10 years ago type. Type of investments that we're often trying to find there. And so we're really excited about being able to do that for clients. Next slide. We've added something in February of last year and Michael and I worked extensively on this for the year prior to develop this, which is to say, what if we took all of our favorite and fundamental investments where we've done the work, we do like them across across all our different strategies, but then overlaid with that a quantitative model or set of quantitative models and analytics that ultimately we've got a, the result was something that we liked fundamentally and quant models also liked. The result of that is what we think is the best of both worlds. Tactical Select provides a fundamental fundamentally sourced and driven set of ideas that is then screened and refined through a number of quant models. I mentioned that we utilize and optimize some of the Stansberry research tools. Tradesmith is one and Tradesmith's quantitative tools are part of the answer for Tactical Select. We also utilize our own proprietary tools. We look at Stansberry score. We look at Chaykin analytics. We look at some other things as well. The result has been fantastic. Since inception in February 1st through the end of August, we've returned 35%. That has outperformed the benchmark by nearly or by more than 1,500 basis points or 15%. Year to date has been the same thing. We were up nearly 21%. We were up nearly 21%. We were up nearly 21%. And that is outperformed the benchmark by more than 8% or 800 basis points. Michael, anything you'd want to add to talking about Tactical Select? Sure. Well, I mean, the performance speaks for itself and we don't want to like be bragging about it, but that level of outperformance is pretty rare in our industry. So we're obviously proud of it. I guess what I would add is folks always ask us about performance and what's the strategy done and what do we think it's going to do? And it's, you know, natural and makes sense why they would ask. But almost as important, but rarely asked is how much risk we took to get that performance. And, you know, it's great to be up 30% in any given year. If you lose 50% the next year, that's not a great way to build wealth. So, you know, the risk side of that coin is very important. Austin mentioned we worked on this strategy a lot before launching it. We did extensive back tests and I'll just tell you that, you know, we were impressed with the results and it did great during up markets. But the most impressive part to me, Austin, I think you feel the same, was what it did during down markets and the ability to sidestep bear markets was really impressive. Now we haven't had a bear market since we launched the strategy, but we have had some drawdowns. And what we're encouraged to see is that not only does tactical select so far, it outperforms when the market's heading up, but when we have those pullbacks and drawdowns, it has been down less than the overall market. So up nicely when the market's up, not down as much when the market's down. You talked about alternative investments, Austin, and having those higher risk adjusted returns. And that being the holy grail of investing. That's really what tactical select has done so far. That's right. Yeah, no, thank you, Mike. I think that's right. And these are the types of productive assets that we want folks to invest in. But you mentioned risk management, and that really is a core piece of step number five. You need to put it all together in the right way to maximize risk adjusted returns over the very long term. You need to have a full suite of portfolio management tools. And really those are focused on if we could simplify it into three concepts. One, appropriate position sizing, critical risk management, and then finally, lowering the correlation of your overall portfolio to each of the assets within that portfolio and to the overall market itself. So I think position sizing sort of speaks for itself. We don't want too many positions. 200 positions is too many. Two positions is too few. We want to be appropriately concentrated in our best ideas so that they can positively impact your portfolio. But let's talk about the next two. Risk management. I think it's important to note that when we talk about risk management, we are looking to make sure we are not too overexposed to any one sector or industry. We're also want to make sure we're focused, we're not exposed to any one risk factor. And one of the risk factors that we saw within credit was rising rates. Pretty simple, but you do not want to own bonds when you expect interest rates to rise, or when you expect default rates to rise. And so as we entered 2022, we made sure that none of our strategies owned any credit. Owned any credit. And that decision was important. And it led to some material outperformance and protection of capital for our clients. Because again, even if you were invested in better performing credit instruments in the beginning of 2022, as interest rates ripped from zero to 5% on the short side of the US treasury market, your fixed income. Your fixed income instruments went down in value. And some materially down in value. In fact, Michael, there were 30-year US treasuries that dropped, supposedly safe, that dropped by more than half their value that were just issued before this period and towards the end of that period still have not recovered much of their value. So that's an example of prudent risk management, not just on sectors, but also factor-based risk management is really important for you to protect in your asset base and being invested in productive assets at the right time. Next, we want to lower the correlation of our portfolio. This is key. This reduces the drawdowns in our portfolio. The problem with 2022 was when market, when equities sold off, so too did bonds. So they did not provide that negative correlation that most people think they should. We insulated portfolios by not owning bonds. But another thing we did is own merger arbitrage investments. Now, we're running tight on time, so I'll be very quick about this. But the idea for merger arbitrage investments is, in a plain vanilla, in a plain vanilla, think about the example of when Elon Musk said he was going to buy Twitter. He said he was going to buy it for a set price in cash. And the stock goes from $30 to most of the way towards that $50 plus effective takeout price. The difference between the current trading price of the stock and the takeout price is a spread. Now, whether or not, when you own the stock, when you own the stock at that lower price, it goes up or down is based on what the market's perception, and ultimately whether the deal occurs. The risk in that portfolio or that investment is idiosyncratic. It is deal specific. So what happens when you add idiosyncratic risk to your portfolio and you reduce market risk is that you reduce overall portfolio risk. So in the chart below, as you can see here, we've tried to demonstrate this by isolating the days over the last five years when the S&P 500 has dropped by at least 1%. Those are the bars in blue. The corresponding bar right next to it, in orange, is the merger arbitrage ETF. It's a basket of merger arbitrage investments that are occurring currently. And what you will see is that most days. Merger arbitrage ETF. It's a basket of merger arbitrage ETF. It's a basket of shares in the market. It's a basket of shares in the market. And in many cases, it actually had a positive performance. So adding lower correlation investments and sometimes negative correlation investments in the form of shorts and other hedges to your overall portfolio, we can see that. We can reduce drawdowns. We can reduce drawdowns. And in doing that, we can improve our performance by having a lower drawdown, a higher low from which to come out on the other side when markets recover. You can see that in our strategies versus their benchmarks very quickly. If our strategies had more volatility than the market and then their benchmark, each of the numbers in the right column would be above the market. And in many cases, we can see that in the right column. And in many cases, managers will try to beat the market and beat their index by taking undue risk. And so you'll see them have betas or volatility in excess of the market. That is not the way we believe is prudent to invest our clients' capital. So in every one of our strategies, our volatility, our beta is lower because we utilize very important risk management. So I want to conclude with just one discussion about us. And that is, we're running a little late. So let me focus on the top and the bottom line here. But really, Michael and I and the rest of the team at SAM are focused and Claire are focused on building or abiding by the golden rule. We are focused on building investment management team that we would want managing our capital and helping us with our financial plan where the roles are reversed. And we do that by providing active, informed, sophisticated investment management and holistic financial and wealth planning. We also act as a fiduciary. We value your input. But then most importantly, at that bottom line, we eat our own cooking. Michael and I are invested in every person in the investment team is invested in our strategies right alongside you. We have skin in the game for every investment decision we make. I know I think that would be important to me to know if I were considering an investment manager. So I just wanted to make that clear for you guys. So I want to thank you for your time. I know we're running a little bit up towards that hour, but we've still got a little time for questions. Let's take some of those. So let's look at the first question here. Do you think the U.S. will go into recession soon? And if so, how might that impact your approach to investing? Michael, why don't you take the first piece of that and I'll take a second. Sure. So will the U.S. have a recession soon? My short answer would be no. If you think about what the definition is of a typical recession. It's two quarters of consecutive negative GDP growth. And we had growth last quarter. We're projected to have about two and a half percent growth this quarter. So by definition, we're at least several months away from a recession. But that said, we'll have one at some point to be sure. And they've kind of become an anomaly. We haven't had a lot of recessions over the past few decades. And the ones that we have have been terrible, like the financial crisis. So I think they've kind of become this boogeyman where people are really afraid of recessions. But if you look over a normal period, a longer period, I should say, they happen a lot. It's a pretty natural thing. And they aren't always as bad as the ones we've had lately. Sometimes they're small recessions. Sometimes they happen and don't even impact the market. And we have a bull market continue right through a recession. So we'll see what sort of recession we have when it comes. But I don't anticipate that there's one right around the corner here. As far as investing in one, I tend to think that it's a frustrating answer, but often the true answer with investing, which is that it depends. It depends on how deep the recession will be, I think, Austin. And what sort of factors are driving it. But is there anything you'd add as far as how to approach investing if a recession is ahead? Yeah, I think I'd say, yeah. So look, economic activity is definitely slowing. To your point, there's no way we will avoid a recession forever. Although we have avoided it longer than 99 % of the pundits out there have predicted. And the ones that have told you to be out of the market, have cost you money. We think it's prudent to raise cash. Our strategies have more dry powder than is normal in the form of cash, gold, and in some cases, short-term US treasuries. But when we're filling our portfolio with those productive assets, it's for two reasons. One, it's hard to predict exactly when that recession will occur. But two, the ones that we own. We're focused on companies that we think will do well throughout the recession or into a recession, take advantage of that, gaining share, improving their relative to competitive position. The other thing I'd say is that doesn't mean we're blind and we're going to be setting it and forgetting it. We do believe actively in that investing is seasonal. And that it does make sense to be tactical. So were we to see a recession imminent and were we to see the market have not have corrected yet on that, we would be dramatically reducing our exposures. We probably don't need to share the screen anymore, Michael, but we've got a couple more questions I want to get to. Let's see. I'm a credited investor. How could I get more information about your alt offerings? Hit that before, but I'll just say again, just let us know. Flag in the Q&A that you'd like to get more information and we're happy to provide that to you. I probably should say just in general, if you want to get more information about anything we're doing, you can do that. Just simply raise your hand on this event or you can go to our website and click the Get Started button in the upper right hand corner where you can set an exact time that you'd like for someone to get back to you. Let's keep going here. What are your thoughts on owning gold and commodities instead of stocks? Thoughts there, Michael? You have to take a crack at that one. Golden commodities. The largest commodity is energy and we're pretty bullish on the energy market. I'd say for me personally, it's maybe my favorite sector to invest in right now because energy companies by and large have strong balance sheets. They're gushing free cash flow right now and the valuations are reasonable. We like energy. We like gold. We have a gold strategy. It invests in physical gold, but also miners and royalty companies, which is one of our favorite business models. It's incredibly profitable. That said, I guess I'd think back to those charts that we shared with the debt going up, the dollar going down, and we think that will continue. I think commodities, particularly like gold, have a place in a portfolio as an inflation hedge and as a hedge against dollar declines, I wouldn't put them as a replacement for the productive assets that we talked about. I think that is a better core for a portfolio, but in order to have a well-rounded portfolio and as I said, I have a hedge in there, I think commodities have a place. We've tended to prefer investing in the producers rather than directly in the commodities. commodities, as many know, commodities, as many know, can be incredibly volatile and they also are driven by factors that are completely unpredictable like the weather. We like more predictability in our investments when we can have it. That's been our approach. Anything you'd add there, Austin? No, I think that's right. For some investors, one of the more controversial things that we'd say is that while we like gold and some commodities as a store of value, certainly superior to cash. We believe that cash will be debased. Money supply will increase at a rate far faster. Inflation will be far higher than the supply of new gold, for example. I just do not think those folks that are hiding out in only gold are doing the right thing and they're not protecting their purchasing power the way that productive assets will. Like you said, we want to own, in many cases, the companies that will benefit from those commodities, but in a lot of cases, those aren't always the best businesses. Those aren't always the best businesses. We identify ones that are better that have good returns on invested capital. And a lot of times we want to own something that is just a superior business. All right, let's hit a couple more. Can I invest in multiple SIN strategies? Yes. The answer is yes. What else would you add to that, Michael? I mean, a lot of our clients do that. They find that there's a blend that's most suitable for a blend that's most suitable to them. Also, because maybe they have a retirement account that they'll put in this strategy that may work better. And then, you know, our forever strategy that's really tax efficient, low turnover, maybe they'll put that taxable account in that. Yeah, I'd say from my experience, sometimes people get overwhelmed because we do offer a fair amount of strategies. We're not a one size fits all kind of firm. But with that comes, you know, some initial confusion about which one's right for me and should I invest in this one or that one? What are the differences? That's something we walk all our clients through before investing. And Austin mentioned, you know, we were offering an assessment for folks that are interested. That's part of the conversation, right? We walk through what are you trying to achieve? Ultimately, that's going to guide what strategy or combination of strategies makes sense for you. So that's absolutely something we assist with and not something we expect folks to know ahead of time. Okay, great. And let's see, someone asked, can you tell me about how Tradesmith and Chicken Analytics fit into your overall SAM structure? Do you want to, maybe I can hit that quick. Sure. I think it's important, again, to note that we are a fiduciary focused on investing in our clients' best interest, focused on doing that to the best of our abilities with ultimately a decision based on what our investment team comes up with. We utilize a great number of resources to determine and find the best fit of investments for our clients based on suitability, based on what we think the returns are going to be. And some of those tools that we use that inform us are some of the very great tools from Stansberry Research, Tradesmith, Chaykin Analytics, Altimetry, Porter & Company, and the like. They're independent businesses. Those are publishers of both research and data properties. We think they have some very great tools. We utilize those alongside of our own proprietary research. It does have a big impact. I think that there's some great tools to be had there. If you're asking specifically about Tradesmith, one of the things are trailing stops. Trailing stops and volatility governors do factor in to some of our strategies, most notably tactical select. That is one of the ways that we can get lower, less invested and protect capital as the stock market loses volatility and loses momentum. Sorry, increases volatility, loses momentum. We look at Chaykin Analytics. We look at the Stansberry score to inform what we're doing, but they do not govern what we're doing. Ultimately, it's our call as the investment committee. Anything you'd add to that? I mean, I want to say that in as complimentary way as possible. I think that they are some great tools, but that's a separate business. I think that's well put. We obviously have great resources, so we want to take advantage of it. And it can be the platforms are great tools from a quantitative standpoint. And the research is wonderful. Some of my favorite investments that we have right now have been sourced from Altimetry and Porter & Company. So yeah, we absolutely use them. Great. Fantastic. Well, let's leave it at that. We've got a lot of great questions here, but we'll get back to you on many of these. But Claire and Michael, I really appreciate your time and thoughts and effort here. Folks at home, really appreciate your time and patience with some of the issues initially. But just your focus on how to improve your investing and establish that investment success. We wish you all the success in doing that. We hope that we can be a part of that. But even if we can't, genuinely for Michael and Claire and me and the rest of the SAM team, we want to thank you and wish you the best in making it happen. Thanks, everybody. Thanks a lot.