Downtown Josh Brown

Joshua Brown

CEO of Ritholtz Wealth Management, CNBC's The Halftime Report, Author, The Reformed Broker

THIS CHAT HAPPENED ON May 05, 2016

Discussion

Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
Hi - my name is Downtown Josh Brown and I'm the CEO of Ritholtz Wealth Management and the author of The Reformed Broker blog. I've been commenting on markets and the investment advice industry for eight years on the web and on my CNBC show, The Halftime Report. I'm a big believer that technology is revolutionizing finance in many unexpected ways. I'm thrilled to be chatting with you, ask me anything! Thanks everyone, this was fun!
Andrew Ettinger
Andrew Ettinger@ettinger · 👟 @wearAtoms // ex @Twitter @ProductHunt
As the Chairman of the Twitter Federal Reserve, are you long on Twitter?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@andrewett I am, unfortunately, a shareholder, but have bought and sold a few times. I have no idea why.
J S
J S@whatdrexlersaid
@reformedbroker @andrewett I watched the last three seasons of Dexter.
ɯɐɥƃuıuunɔ uoɯıs
ɯɐɥƃuıuunɔ uoɯıs@simoncunningham
Do you believe that religion is an important part of being healthy and successful in your work?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@simoncunningham the early settlers of America had this thing called Predestination as a big part of their religion (Protestantism, Calvinism). Basically, they believed that you could tell whether or not someone was destined for heaven by how successful and fruitful their labors were on earth. Farmers, merchants, builders, industrialists who began this nation were predominantly Puritan, Presbyterian, Lutheran and Quaker – all carrying an inherent desire to work hard and grow wealthy as a demonstration of piety and closeness to the lord. Calvinism came over on The Mayflower - was a big part of laying the foundation for American-style capitalism. There might be something to that. I'm not religious, myself but I do not think I have it all figured out.
Steven Sinofsky
Steven Sinofsky@stevesi · a16z
Great to have you on PH Live 😸. I'm always fascinated by the rountables on CNBC and the challenges you face commenting on buy backs/dividends of public companies. It is easy to love these as shareholders simply because of math, the price goes up. And easy to be critical because it feels so Q over Q manipulative. Do you have an algorithm to decide when to be positive v. critical of these efforts?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@stevesi the truth about buybacks is like the truth about everything - the answer is gray, not black or white. And everything in moderation is okay. Buybacks are not being done in moderation right now, they're being done in lieu of spending for the future. I heard a stat yesterday that buybacks / M&A last year cumulatively amounted to $750 billion vs only $250 billion in R&D / capital spending. Extrapolate that trend continuing for too many more years and we're in big trouble.
Who would win in a fight? Buffett or Icahn and why?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@zerobeta can Charlie Munger be tagged in?
@reformedbroker Only if Icahn can tag in Trump
Dave Pinke
Dave Pinke@davepinke · Product Manager @ PLI
What is your approach to idea generation? Do you mainly stick to sectors and companies you know and like?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@davepinke I start with technicals and try to identify winning stocks. Then I look at fundamentals and try to understand why a company has momentum and make a judgement about whether or not it can continue. I don't want to get involved with names on the way down most of the time. But that's just trading. Longer term investing is a different story entirely
Stefan Cheplick
Stefan Cheplick@scheplick
What's the first thing you look at when you go research a stock?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@scheplick the chart, always the chart. Not that it's enough, but price and other people's sentiment is probably a good starting point.
What's your advice for someone looking to get into finance/asset management? What skills will be most valuable as the industry changes?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@jnietzel computer science / programming will be a key thing on a resume. my friends who are hiring at asset management firms get excited when they see someone who can write in Ruby or can do algo work. Bigger picture, I think creativity and a multi-discipline background are underrated. There are plenty of CFAs already. Social intelligence / emotional IQ also underrated
Steven Sinofsky
Steven Sinofsky@stevesi · a16z
(One More) Where do you fall on the spectrum of the "reason why corporations exist"? Anywhere from serve customers, generate profit, enrich shareholders? Seems like this is even more unsettled than ever.
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@stevesi I think it should be all of these things. people have to have a purpose when they wake up every morning, having a job to support themselves and a family or future is part of the equation too. Companies may have forgotten that there are stakeholders that matter as much as shareholders / board members.
-vc
-vc@tdatvalane · VP Engineering at Emerio
You (RWM) are producing a wealth of information that from the outside feels like magic. How are you (and others at RWM) filtering through the vast array of data available today? Thank you.
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@tdatvalane we use Bloomberg, stockcharts.com, Returns 2.0 (via Dimensional Fund Advisors), and a host of other sources to build historical looks at the market. We're way more interested in probabilities than forecasting, so we tend not to get too far into the weeds with economic data or the news of the day. Everything has already happened before, with slight alterations in the names, places and products
Alexander Shein
Alexander Shein@alexander_shein · Student
Any advice for sometime trying to enter the industry?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@alexander_shein good connections are more important than almost anything else. It's a tough world to crack into, knowing people helps. I didn't know anyone, and it took me a decade or more to get any traction.
Stefan Cheplick
Stefan Cheplick@scheplick
The one thing you tell new investors about the stock market?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@scheplick I tell people that most of their money should not be managed by themselves, but at least in the early days, they should try to pick and manage a few stock positions as a learning experience. You learn the lingo by being personally invested / engaged. You may conclude that it's not for you, but you should at least have the experience.
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
What is one piece of advice you find yourself consistently giving on The Reformed Broker blog?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@ems_hodge less is more, simple is better than complex, incentives explain almost everything - those are the big three
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
Where do you see yourself in 5 years?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@jakecrump 44 years old, twenty pounds lighter, intimidating my daughter's boyfriends from an upstairs window as they pull up.
Jake Crump
Jake Crump@jakecrump · Community Team with Product Hunt
What does a typical day look like for you?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@jakecrump get up at 5:30. If I don't have a hangover, I ride my bike or hit the gym. Then I'm on the train into NYC and reading the whole way. I spend probably a third of my day reading, a third on the phone or in meetings and the other third combined writing, blogging, tweeting, doing TV, eating, vaping.
J S
J S@whatdrexlersaid
@reformedbroker @jakecrump #FinancialDadsThatVape
Rob Learn
Rob Learn@poloist1 · Finance Student
What are your thoughts on apples stock going below 90$? or is 90$ a good time to be buying apple?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@poloist1 I own Apple at 93 or so. It's probably in for a tough time this year, but the real question is whether or not the market is already pricing in that tough time. I think it is, but sentiment can certainly get worse before it gets better.
How do I get an internship at Ritholtz?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@nrosa send a resume to Kris Venne at my firm. He reads them all!
Chris Walczak
Chris Walczak@cwalsd · Financial Analyst/Writer
What would you say to someone who understands indexing is probably better for after-fees returns but enjoys the process of scouting and owning individual stocks?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@cwalsd do both. Even Jim Cramer is now advocating this and he's the king of recreational stock picking. In his last book, I think he said something about using Indexes as a foundation and then venturing forth with "mad money" into individual names. I don't hate this approach
@calipolonia
@calipolonia@calipolonia · Steve
What do you think the future holds for these so-called "roboadvisors"?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@calipolonia will be no such thing in a few years. Every advisor will be a roboadvisor. Human and robo will converge. I was around at the start of email. Some advisors were using it to talk with clients and some were not. We didn't refer to the early adopters as "Email Advisors". It's a tool, rapidly a commoditized one.
Judy Lozo
Judy Lozo@judy_lozo
What effects on the economy do you foresee if Donald Trump is elected president? What effects if Hillary Clinton is elected?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@judy_lozo I really don't think anyone could have the answer to this question (won't stop 'em from trying!). Think about this. When George W Bush was elected, he was seen as "pro-business", had an MBA and had run companies (oil, Texas Rangers franchise etc). The stock market produced a negative 1% return under his tenure. The economy collapsed into the worst recession of the modern era. When Obama was elected, the attitude was "he's going to be terrible for business." The stock market tripled under his presidency. Corporate profits have never been higher, nor have household net worths or 401(k) balances. Overall, presidents get too much credit and blame for the economy they inherit.
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
I really enjoyed reading the classic 'The Intelligent Investor' by Benjamin Graham (I believe he was one Warren Buffett's mentors). What are your favorite books on investing? Also, what are some of your favorite non-financial books that helped you better understand the world around you and thus make better investment decisions?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@tomstocklein The book that changed my life is called the Go-Giver by Bob Burg and John Davis Mann http://amzn.to/1Wc1O8g I've read a lot more novels and lit than investment books lately, but there are a lot of good ones. William Bernstein's Investor's Manifesto and Deep Risk come to mind. Also, you must read Nick Murray's Simple Wealth, Inevitable Wealth - it's so important to understand and any reader can get it, it's simple but powerful.
J S
J S@whatdrexlersaid
Robo-Advisors are allegedly "scaring" wealth managers, but don't they better serve a crowd that is largely ignored by professionals anyway (net worths under whatever arbitrary threshold the firm sets)?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@whatdrexlersaid see my earlier answer
Rob Jordan
Rob Jordan@robertjordan33
Why are you on ProductHunt? What do you foresee emanating out of the intersection of tech and investing/finance in the near future (e.g., fintech, blockchain)?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@robertjordan33 I guess I'm here because I like to try new things. The future of finance is going to blow peoples minds in ways we cannot yet foresee, so I think committing to being open-minded instead of being prescient will be key
Jory Cener
Jory Cener@jorycener · Brand Director, Green Retail Decisions
What other sectors not yet uncovered are primed to have technology revolutionize them?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@jorycener hey Jory! I think the next big one coming is semi-private aviation for the middle class. It's working it's way down from business travelers to upper middle class people using jets for family vacations. with increased adoption and many more players, prices will come down and efficiency will go up. The airport experience is just absolutely terrible and it's not sustainable.
Jory Cener
Jory Cener@jorycener · Brand Director, Green Retail Decisions
@reformedbroker I could not agree more and as a matter of fact was reading about this today. MacArthur Airport here I come!!!!
Dominic Pazzula
Dominic Pazzula@dominic_pazzula
Fintech: What parts are truly game changing, what parts are passing fads, and which make you just go "meh"?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@dominic_pazzula I guess I see all of this stuff as evolution in the short term and revolution in the long term. No big bang moments, just iterative, incremental improvements. But then they sneak up on you and you're like "Wow, things have really changed!"
Chris Walczak
Chris Walczak@cwalsd · Financial Analyst/Writer
What is a good resource(s) for learning how to read "the chart" of a stock? It can be difficult to separate the wheat from the chaff of technical analysis systems.
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@cwalsd Stockcharts.com is the best resource. Not only is the tool amazing, but it's got millions of pages of glossaries / definitions / explainers, etc
Thomas Stöcklein
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
Are there any industries or sub-sectors that you're bullish on based on either 1) macroeconomic factors 2) demographic factors (aging baby-boomers, etc.), or 3) something else?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@tomstocklein probably healthcare is the most important area of the market over the next decade as the boomers try to live forever. doesn't mean it will be easy to figure out how to play it though
J S
J S@whatdrexlersaid
Oil - O/U $40 by year end?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@whatdrexlersaid wish I knew
Are you buying stock in the New York Islanders right now?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@nrosa lol no! I don't watch hockey, I'm Knicks, Giants, Yankees in that order. That's all I have the bandwidth for.
J S
J S@whatdrexlersaid
If I am a set it and forget it Indexer, how would I be better served by engaging RWM to manage my portfolio? Easy question right?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@whatdrexlersaid the asset allocation isn't the hard part. advisors add value in many ways, from protecting people from their own emotions to asset location (tax alpha) to estate planning to goal-setting, to income distribution, etc etc. The areas of a clients life we touch (and hopefully improve) are almost infinite.
Rob Learn
Rob Learn@poloist1 · Finance Student
What advice do you have for a 20-22 year old couple both majoring in finance and looking to get into investing in stocks? For the conference in dana point California do you have to be an financial advisor to attend?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@poloist1 Dana Point is open to all, FAs get in free. My advice is to read books about investing and history's great investors.
Amer Ramamni
Amer Ramamni@amer_ramamni
If you own 5 different stocks, 100 shares in each stock, and you want to hedge, how many SPY puts would you buy ? I need to read/learn more about hedging, any you recommend ? I went to UMD College park as well. Go Terps !!
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@amer_ramamni options definitely not my area. Dan Nathan @riskreversal is your man for that Q
Amer Ramamni
Amer Ramamni@amer_ramamni
@reformedbroker @riskreversal Josh - So you don't hedge ??? how do you hedge your personal portfolio ?
Ashok
Ashok@ashokamithiran · lic
Hi, What are your all time favorite books??
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@ashokamithiran The Once and Future King by TH White, the Three Musketeers / Count of Monte Cristo by Dumas, The Source by James Michener, Zion and Trinity by Uris, anything by Tolkein. Bernard Cornwell is a favorite author. Just read a novel The Sellout that knocked me on my ass, some of the best writing I've yet come across. Here are some recent reviews I've done on Kindle: https://www.amazon.com/gp/profil...
Bihu Capital
Bihu Capital@bihucapital
How come you're not a fan of Better Call Saul?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@bihucapital so fucking boring. the show should be about Mike, not Jimmy. Also, I hate prequels. Because I already know who makes it and who doesn't. That was the big mistake Lucas made in the late 1990's. Besides Jar Jar.
Jay Hill
Jay Hill@jayhill2012 · Businessman
Josh, the "Abundance" blog post was a favorite of mine and reminds me of an old Thoreau quote along the lines of "being busy isn't enough, what are we busy about?" To that end, FANG stocks et al are media darlings and have performed very well in recent history. At the same time productivity numbers have fallen to lows not seen in many years. Do you feel these popular companies are also undermining productivity/performance of our economy?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@jayhill2012 there is no doubt that Amazon, Google and Facebook carving up 90% of our time and attention is having an impact on the economy and that our 1960's era measures of productivity are not geared to capture what's really going on. We may not understand it for years.
Rob Learn
Rob Learn@poloist1 · Finance Student
how does having a law degree and a finance degree go hand in hand ? For example the CEO of goldman has a law degree and same with cramer.
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@poloist1 I'm sure it can't hurt. probably makes you very valuable to an investment bank.
J S
J S@whatdrexlersaid
@reformedbroker @poloist1 Both require a high-degree of "bullshit" competence - both dishing it out and detecting it.
Amer Ramamni
Amer Ramamni@amer_ramamni
how do you hedge your personal portfolio ? strategies ?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@amer_ramamni if you construct a portfolio for volatility up front, adding new hedges becomes unnecessary. I'll repeat what Nick Murray says: "Anything that suppresses volatility also suppresses returns" - that's an immutable law of finance. Also, what are we even hedging against? is volatility the real risk? I don't think so. The real risk is not saving / investing enough and not earning a high enough return. The real risk is running out of money later in life, when we cannot AFFORD to take on more risk. So when do you want your risk, now or later?
Issam Freiha
Issam Freiha@if2206 · Partner | Alrai Capital
Do you make any VC/Angel investments ? If so what's your biggest area of interest in tech outside fintech? If not, why not?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@if2206 I have passive stakes in a handful of venture-backed companies like Riskalyze, StockTwits and Brightscope. I was an early adopter / advisor to all them.
Snah Desai
Snah Desai@s_haverford · Operations Analyst, ServiceTitan
what are some FinTech startups that you are most excited about?
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@s_haverford good question, I think Riskalyze has a lot of potential, but I'm biased there. Also, I think StockTwits has the best app for traders - it opens on a page of trending tickers so you can really get a good sense of what's happening. Betterment feels like it's going to be big, much bigger than it is now.
Jay Hill
Jay Hill@jayhill2012 · Businessman
Thoughts on TSLA report yesterday? Musk is brilliant but 500k cars in 2018?! This year they're making about 80k and need more cash..
Downtown Josh Brown
Downtown Josh Brown@reformedbroker · CEO, Ritholtz Wealth Management
@jayhill2012 I love Elon Musk and everything he's doing. I am not an investor in Tesla stock.
Rob Learn
Rob Learn@poloist1 · Finance Student
Would you recommend an index fund or individual stock picks for a young investor who doesn't have to much capital under his belt yet?
Amer Ramamni
Amer Ramamni@amer_ramamni
@poloist1 Index fund - when you have more capital, then you can choose/pick stocks. Make sure you have 8 months saved up as emergency fund, pay off your credit card, make sure you have no debt other than home and car, then you can start picking individual stocks.