The Dividend Cafe

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The Magnify Moment in COVID Oct 23, 2020

Show notes

There are a couple things going on right now at The Bahnsen Group that make this a very fun time of year, and a very fun edition of the Dividend Cafe. I wrote last week about the annual money manager due diligence trip I have done since 2006 and how important it is to our business (and to our clients). The meetings of the last couple weeks, this year, coincide with the launch of our “Operation Magnify,” the largest portfolio undertaking we have ever experienced at our firm.

So today’s Dividend Cafe takes the reasons Operation Magnify became necessary, juxtaposes it with this COVID moment (what it supposedly means, what it most definitely does not mean, and what some think it may mean), and then applies lessons learned from our recent meetings and collaborations. I am aware the world is mostly focused on the election event coming up a week from Tuesday, November 3. There very well could be ample uncertainty and market volatility that comes as a result of the election (or the non-result). It would be difficult for me to devote much more attention to that subject than I have.

But the topics I want to dive into today are leaps and bounds more relevant to investors, long-term, than whatever uncertainty volatility the election results create. And like many understandings of the connection between politics and our portfolios, I believe the topics I am addressing today are riddled with misunderstanding.

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” (wrongly attributed to Mark Twain). Let’s jump into the Dividend Cafe!

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Market Outlook w/ David L. Bahnsen - Conference Call Replay - Oct. 19, 2020 Oct 19, 2020

Show notes

We look at the state of the markets with the election a couple weeks away, what we mean by “post-COVID” market realities, and spend time reviewing some of the major takeaways of our recent meetings with New York City portfolio managers.

Links mentioned in this episode: DividendCafe.com TheDCToday.com TheBahnsenGroup.com

Never Forget the Deja Vu of the GFC and a Love Letter to NYC Oct 16, 2020

Show notes

Late in 2006 I was running a practice at UBS Wealth Management and using their equity management team out of Chicago for a lot of my equity management services. I would go to Chicago and meet with them at least a couple of times a year and found the process collaborative, informative, and intellectually engaging. But all of my other money manager relationships were in New York City, so when UBS asked me to go to speak to their new advisor class in November that year (in Weehawken, NJ, where their operational headquarters are that they inherited from the old Paine Webber), I decided to schedule a few meetings with other portfolio relationships. I was only overseeing $100 million at the time, 4% of the assets we manage now, yet it never occurred to me that I may have a hard time scheduling appointments.

As a pure aside, this trip double-dipped as a recruiting trip for another major Wall Street firm who was pushing me to join them in the opening of a new Newport Beach office for their firm. I met with their legendary CEO, a fellow named Ace Greenberg, and heavily considered their extremely flattering offer. The name of that firm … Bear Stearns. In March 2008, they would be dead and gone, sold to the loving arms of JP Morgan for $2 per share (from over $150). Suffice it to say, I didn’t join them after those enticing meetings. God was watching.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Investor Lessons from a World of Doing Something Oct 09, 2020

Show notes

I did something today I have not done with Dividend Cafe, ever. I just wrote it. I just sat down and started typing, and wrote it, all the way through. I didn’t cover ten or fifteen or twenty topics like I usually do. And I didn’t write some parts on a Saturday and other parts on a Tuesday, adjusting for new market action on Wednesday, etc. I wrote in one sitting an entire treatise on what I believe is the great paradigm to understand in the years to come for investors. Don’t worry, I went back and added some sub-titles to “break it up” a bit, but it really is one topic all the way through.

I really hope it will inform you, guide you, challenge you, and to some degree, edify you. I also hope it will provoke you to reach out with any questions you may have. We invest for the world that is, not the one we want. And some years, the delta between those two seems wider than other years.

Jump on in, to the Dividend Cafe.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Lessons From the COVID Era - Introducing Operation Magnify Oct 02, 2020

Show notes

I wrote the majority of this week’s Dividend Cafe before the news had broken that President Trump and First Lady Melania had tested positive for COVID. We wish them a speedy recovery, of course, but don’t have much to say about “market implications” of such, other than the obvious – more uncertainty, more volatility. I will hold off on political and market implications for a few days, for obvious reasons.

There are lessons from the COVID era that will stick with us forever. Most of them, mind you, if not all, were not new lessons - they were reminders - reaffirmations of timeless lessons and principles. I am not sure the way we were reminded of some of these lessons felt familiar. Markets do not often drop 36% in 31 days. But these general principles all held true, in spades.

In this week's very important Dividend Cafe, I am going to write about some of those lessons (not all of them), and transition that into an opportunity to MAGNIFY what we believe at The Bahnsen Group, what we are doing now, and how we are using the COVID moment to optimize client portfolios for the years to come, all by just MAGNIFYING what we have always believed.

This Operation Magnify that we have been developing for months is both a proactive and reactive process. We want to take new realities to their logical conclusions and apply them into an investor's portfolio, and we want to create an entirely consistent process and infrastructure by which we assess and administer this on behalf of our clients.

If you are not a client of ours, it really doesn't matter. The moment you are living in is a moment of paradigmatic change for investors. Viruses and the risk of viruses have always existed. "Tail risk" events that shock and awe markets have certainly always existed (and always will). But there are fundamental realities that have changed - many of which were well under way pre-COVID, I assure you - and the discussion in Dividend Cafe today is useful even for those not under our care.

The same is true of your approach to investing, and that is where we are going in today's Dividend Cafe.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

FINAL Covid and Markets - Tuesday September 29 Sep 29, 2020

Show notes

It is a bittersweet moment for me to present my last ever missive of COVID and Markets. Okay, it is a lot more sweet than bitter. I truly believe the essence of the markets lesson from COVID has been learned, and that the ongoing story of economic recovery, policy response, and all the various implications of things will live in for some time to come. But included in that essence is the reality of living with COVID, protecting the most vulnerable, and engaging trade-offs around reasonable safety measures for public health vs. the existential and economic need to have a functioning society. There are a lot of resources out there producing a truly intelligent, sober, and informed perspective on COVID medically, which really do seek to neutralize the panic-porn sensationalism so many have fallen into. This can’t be one of those resources. I don’t have the expertise or bandwidth to fully dedicate myself to COVID/medical information. It has been integrated with my work for six months, and I am proud of what I have learned and what I have presented, but it was always, always, always intended to be a part of the broader economic and markets story.

I am a markets guy, with every ounce of breath in my body. And the COVID part of COVID & Markets is no longer on my front page, and shouldn’t be on yours either. So I have to be honest.

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

National Video Conference Call Replay - Volatility & This Current Moment in Investing Time - Sept. 28, 2020 Sep 28, 2020

Show notes

with your host David L. Bahnsen, CIO and Managing Partner of The Bahnsen Group

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Jumping Around But Staying Out of Trouble Sep 25, 2020

Show notes

There are a lot of places to go on the map right now. Markets were not just "up" throughout most of June/July/August, but they were "boring" in the way they did it. Limited volatility. Total transcendence to some of the silliness in how the media covered COVID. And a pretty consistent slow-burn to the upside. September has now invited normalcy back, and by normalcy, yes, I do mean frothy, over-valued tech positions getting re-priced (and that process could be in very early innings from where I sit), but also just plan going up and down - the standard bi-directional definition of volatility.

We have a number of things going on in markets right now that will be discussed in this week's Dividend Cafe, and I suspect the conclusions I draw will be really satisfying for some, and really unsatisfying for others. I am hearing more and more people talk about certain things that seem obvious to them. This is the most bullish thing you could hope for if you are a contrarian (or a half-way decent hedge fund manager).

In this week's Dividend Cafe we will look at ... • What all may be wrong or not wrong with markets • Five facts to focus on through the weeks and months ahead • Cash levels are still very, very high - but what does that mean? • Whether or not 2009 has anything to teach us right now • All the things happening in the economy (must read) • Politics and Money, and now the Supreme Court? • And of course, the Chart of the Week And with that, let's dive into the Dividend Cafe ...

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Covid and Markets - Thursday September 24 Sep 24, 2020

Show notes

The market had been pointing to a modestly positive opening all night and into the very early morning futures action, but around 5:30am turned south, again led by technology. The market opened down 250 points, and then went up 500 points (so up 250 on the day), and then bounced around throughout the day. It closed up just +50 points or so with all indexes about the same on the day in percentage terms. The timing of the downturn this morning came right as the weekly jobless numbers came, but truth be told there was nothing unsurprising at all in the jobs data, so I doubt that was related. More or less, I think the markets are zigging and zagging because that is what they do – and notoriously so this time of year. I do not expect anything different for the next couple of months. Lots and lots of COVID info today, and plenty on housing etc. — off we go!

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Covid and Markets - Tuesday September 22 Sep 22, 2020

Show notes

The market dropped 500 points yesterday but today rallied back ~140 points. One big tech name today was a huge part of the S&P/Nasdaq rally …

The market drop yesterday (at one point down nearly a thousand points, but closed down ~500) allegedly started with a report that a number of global banks had “moved illicit funds” over a 20-year period from 1997-2017. No doubt, this was but one factor with talk of another lock-down in the UK being another, and concern about greater political (and societal) drama (in the aftermath of the Justice Ginsburg passing) being another.

Let’s go around the horn today with ample COVID information and perspective, and plenty on the public policy front, housing, and Fed as well …

Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

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