Real Talk with Rabih #1 – Episode #328

On this episode of the Dentist Money™ Show, Ryan welcomes Rabih Dimachki, Dentist Advisors investment operations manager, for “Real Talk with Rabih.” It’s Rabih who keeps his finger on the pulse of global economics so he can analyze client portfolios, execute trades, and provide guidance to our team. Now Rabih will be sharing that expertise with our listeners.

 

 

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Podcast Transcript

Ryan Isaac:
Hello everybody, welcome back to another episode of the Dentist Money Show, brought to you by Dentist Advisors, a no-commission fiduciary comprehensive financial advisor just for dentists all over the country. Check us out at dentistadvisors.com. Today on the show, I’m interviewing for the first time a good friend and employee of Dentist Advisors, Rabih Dimachki, and… I probably didn’t say his name right? He’ll correct me in the interview. Robbie is a CFA who is in charge of our portfolios, our trading, our rebalancing and the person who has his pulse on everything going on in the world, in the economy, in the markets. So when we have questions from clients, we need research, this is the person we turn to internally at Dentist Advisors.

Ryan Isaac:
This guy is so smart, so smart, I have to ask him to repeat himself and get out a crayon and draw for me in a picture, so I can understand it. I’m so happy to have Robbie on the show. We’re talking about the the greater global economy and how it affects markets. We’re talking about inflation and interest rates and we’re gonna do this a lot in the future. This is the first of many, I really hope. It was a total pleasure, this guy’s the best and many thanks to Robbie for joining me and spending some time and lending his expertise on this afternoon for us. So if you have any questions for us, please go to dentistadvisor.com, and click the book free consultation link. Let’s have a chat. Schedule a time to talk with one of our very friendly advisors today. And thanks for being here everybody. Enjoy the show.

Announcer:
Consultant advisor, conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors a registered investment advisor. This is Dentist Money. Now, here’s your host, Ryan Isaac.

Ryan Isaac:
Welcome to the Dentist Money Show, where we help dentists make smart financial decisions. I’m your host, Ryan Isaac and I’m here for a very first inaugural special episode with a member of our Dentist Advisors family. I’m here with Mr. Rabih Dimachki. Robbie, what’s up, man?

Rabih Dimachki:
Hey, thank you for having me. How are you?

Ryan Isaac:
First of all, you’re gonna say your name the right way for everybody, which I did not say the right way. How do you say your name the right way?

Rabih Dimachki:
I’m Lebanese, so the right way to say my name is Rabih Dimachki. But Robbie Dimachki just works just fine.

Ryan Isaac:
And we just say Robbie, and the way we say it is more like R-O-B-B-I-E, Robbie? [chuckle]

Rabih Dimachki:
Yeah, that works.

Ryan Isaac:
That’s the way we say it. Robbie, let’s give a little background to everybody on, when did you join us? What’s your background like and what do you do for Dentist Advisors?

Rabih Dimachki:
Sure. I joined Dentist Advisors around two years and a half now. I remember you interviewing me. Remember that?

Ryan Isaac:
Yes, yes I do.

Rabih Dimachki:
Great day.

Ryan Isaac:
Yeah.

Rabih Dimachki:
My background is mainly investment-focused. I finished all three exams of the CFA. So I’m the guy you’d expect to be trading the accounts, to be building the models. And…

Ryan Isaac:
Can you stop right there and explain what is the CFA? Because the CFA is another… It is an entirely other level of academic rigor. And there are three levels like you just mentioned, you’ve done all three. And most people, the vast majority stop at level one, even if they pass it. Can you explain a little bit of what is the CFA? And what’s the typical… And when we say CFA we’re not talking about just an average everyday person here. We’re talking about the kinda people who are economists and large-scale portfolio managers and… What’s a CFA for everybody?

Rabih Dimachki:
The CFA is short for Chartered Financial Analyst, comes from the CFA Institute. It’s an organization that likes to set very high standards for what investment professions should be doing in this industry whether from a ethical background and know how background. The program entails sitting for three long soul-crushing exams. And it takes an average four years to go through the whole process and I’m very glad I’m done.

Ryan Isaac:
Yeah, sure.

Rabih Dimachki:
And now I’m happy to share some of the knowledge I gained along the way and… Yeah.

Ryan Isaac:
So cool.

Rabih Dimachki:
This is what makes the conversation better.

Ryan Isaac:
Yeah, it’s so cool, congrats to doing that. That was… We can’t officially publish you as CFA until you get the credential mailed to you, right? In a few weeks or something.

Rabih Dimachki:
Yeah, some paperwork pending.

Ryan Isaac:
So we won’t officially say it or post it on this episode. But the next one we will. We wanted to have you on like I said, we’re gonna do a webinar with you here coming soon. And we wanted to have you on because… And I’ll have you just explain your day-to-day. How you’re involved with Dentist Advisors, trading operations and portfolio management. It’s a super important job. It’s getting bigger and bigger every year. And you just have such insight and are so plugged into everything that’s going on in the world. And the studies and the research and academia out there that helps us know how to navigate, investing for our clients. How about let’s just start like, what’s a day for you at the Dentist Advisors or maybe a week? ‘Cause there’s a lot of things you do, maybe on different days. But what’s a week like for you at Dentists Advisors, managing portfolios?

Rabih Dimachki:
Yeah, sure. It starts with checking the stock market, at the moment the alarm clock rings. You know?

Ryan Isaac:
Yeah.

Rabih Dimachki:
Making sure the margin is up or down, just setting myself in the zone. Once I come to the office, I usually do a brief reading about what’s happening in the market, where are we heading, any major news that showed up, and then we get to work. We look at all of our portfolios, we make sure the cash allocation is in target, the securities are where they’re supposed to be. And we work with the advisors whether you, Matt or the full team, solving client requests. Whether it was an investment analysis, whether it was a special case that the client requested that we tailor it specific for their situation. And we do this until the market closes. And after that, it’s a new project, looking at stuff where we review our models, do… Looking…

Ryan Isaac:
I saw some harvesting, like we just kinda went through that exercise, yeah.

Rabih Dimachki:
Sure. And mainly, we focus on making sure all the portfolios are on track to what we said is gonna happen to them. And… Yeah.

Ryan Isaac:
Yeah, it’s cool. You said something interesting and there’s a lot of misconceptions about what we would describe to clients or someone who’s looking to hire us as we would describe ourselves as market investors. We’re not trying to beat things, time things, predict things. We’re trying to capture these frankly wonderful long-term returns that global markets will give over long periods of time. And that’s a simple statement. But it is not an easy thing to do or keep up or do for decades, which is the whole… That’s the magic, is you have to keep it up for decades. So when you say you wake up and check news or check stocks, I think some people would hear that and go, “Oh, if the news is bad, Robbie is gonna go in and trade portfolios and exit things and get into other stuff. Or if it’s good, we’re gonna go into that and get out of other stuff.” That’s not what you mean. Because even with a simple market-based approach, even if you’re gonna stick to things for a long period of time, you still have to know what’s happening in the world, which is what you’re describing you spend much of your day on.

Rabih Dimachki:
Exactly, exactly. So if I wasn’t working here and I was giving my money to Dentist Advisors where they’re helping me not worry about this stuff, I don’t need to look at the markets. I can ignore the noise. Because there’s someone doing that for me, where they’re looking at this noise in the market. And they are, let’s say, receiving this information, decomposing it, analyzing it, and see where it fits through our long-term perspective on the market.

Ryan Isaac:
Yeah, cool.

Rabih Dimachki:
And this is what I’m doing. So when I’m looking at the market each day, it’s not for me to react as much as it is for me to absorb. And…

Ryan Isaac:
Cool. Well, because we bombard you with questions all the time. I mean, like you said, I don’t know what our exact number is. We’re over 400 clients right now, which translates into probably a few thousand actual accounts. And those are real human lives behind all those accounts. And those are human lives that are constantly moving. People need money. They add money. They have questions. They have life events that change their objectives and their goals and their time horizons. And those are the kind of things that when we bring all those questions to you like, “Oh, this client needs some money for a new real estate project. What’s the most efficient way we can pull money out of which account and keep taxes low while maintaining the proper allocation and risk allocation?” Those are the things we’re bringing to you. And so when you absorb all this stuff, I like that word, absorb, you just have all this context to go, “Okay, here’s how we can handle and respond to these client requests and questions.” And it’s a lot.

Rabih Dimachki:
Exactly.

Ryan Isaac:
Yeah.

Rabih Dimachki:
Exactly. Because no situation is the same.

Ryan Isaac:
No. No.

Rabih Dimachki:
The market is constantly changing. This means our day-to-day approaches are going to change. This doesn’t mean that what we believe is changing. It’s just those small, micro changes that add value on the long run.

Ryan Isaac:
And the changes in people’s lives, that’s the other thing that’s constantly changing too, of… Yeah. Like, “Is that adding money? Needing money, adding accounts.” Yeah. It’s a constantly evolving thing. Let me ask you some questions about what’s going on in the world. You’re absorbing this stuff. And if someone’s listening a couple of years from now, they might… I don’t know, I still think it’s entertaining to hear what was happening. But what are we dealing with in the world right now as market investors? I own the same portfolio as our clients do. And so what are we all… Yeah, you too. What are we all dealing with as investors right now in the world?

Rabih Dimachki:
Oh, a lot is going on. How much time do we have?

Ryan Isaac:
Yeah, as much you want. But yeah, top of your mind. What’s top of mind for you right now?

Rabih Dimachki:
Well, if you just check the news, we’ve got the whole geopolitical risk and issues happening with Russia and Ukraine.

Ryan Isaac:
Yeah.

Rabih Dimachki:
We’ve got the whole investor worry about how many Fed rate hikes are gonna happen over the course of the year. And we are still halfway or 80% through the earning season. And those have been the three major movers for either individual stocks or the market. Our term horizon, in this company is very long. So those really don’t matter. It’s just, “Let’s plug them in. And give them their proper weight. Let’s not pull them out for portion.” But for a very short-term horizon person or for someone who’s retiring in an expected period of time, they might be impactful.

Ryan Isaac:
Yeah.

Rabih Dimachki:
For you and me and me and people who are saving for retirement, it’s fine. Just enjoy the show.

Ryan Isaac:
Yeah. Well, and it’s just good to know. You’re describing a situation where someone who’s 20 years away from technically needing the money is… They’re gonna react maybe differently than someone who’s approaching the five-year mark or the two-year mark, where they’re like, “Okay, I know I’m gonna have to start making withdrawals.” Is this a time where we try to make a portfolio become a little more conservative and start planning for withdrawals and the tax planning around that and how to do it? So I’m curious, we’re gonna talk a little bit of this on the webinar coming up. But how about give us an insight… I think this is just a good general education to have. You were just saying what makes a market… What makes a stock and equity have returns? What makes a stock become more valuable over time? What are the mechanics behind that?

Rabih Dimachki:
It’s an amazing question.

Ryan Isaac:
So I think a lot of people just think it’s like magic or it’s a big casino where people are like…

Rabih Dimachki:
Yeah, we think it’s magic.

Ryan Isaac:
We don’t even know it’s… You put money in and hopefully there’s more later. But there’s a mechanism that’s very, very system… Yeah.

Rabih Dimachki:
Big mechanism. There’s the whole field of academic finance and economics, where people are spending years trying to come up with research papers just to predict how the stock will move and in which direction.

Ryan Isaac:
Yep.

Rabih Dimachki:
I love this question. Because it allows to hit multiple corners at the same time.

Ryan Isaac:
Cool.

Rabih Dimachki:
Before we go into deciding what a return is, let’s just all agree what a price is.

Ryan Isaac:
Okay. Yeah.

Rabih Dimachki:
When you invest in a security and the price of that security is $100, this $100 does not represent anything about what happened in this company since you’ve heard of it until this day. This $100 represents all what everyone in the market agreed is going to happen to the market from now til whatever year in the future.

Ryan Isaac:
Okay.

Rabih Dimachki:
So this $100 now, is all the cash flows that you’re expecting to have, all the new products that this company is going to launch, and all the risks that this company might face.

Ryan Isaac:
Let’s use a specific company. Let’s use Apple, you’re talking about Apple.

Rabih Dimachki:
Let’s use Apple. I don’t have Apple price in front of me. [laughter]

Ryan Isaac:
Yeah, just to put some specifics to it, consumers or analysts, like me as a consumer, I would expect Apple to come out with certain technologies, like a new phone or a new laptop, or I want a phone that folds up.

Rabih Dimachki:
Yeah. The EV car in 2024, everybody’s talking about it.

Ryan Isaac:
A car, yeah. And then analysts have maybe a different view than just consumers do based on financials and metrics, and so that’s what you’re talking about. There’s expectations, and they’re pretty simple. It’s just like, “You’re a company, you’re Apple, and we’re gonna expect you to do something. Improve your past products and invent new ones, ’cause that’s what Apple does.” Or Tesla’s probably a great example of that, too. We’re waiting for something. We want something new and exciting.

Rabih Dimachki:
Exactly. And this is.

Ryan Isaac:
$167. $167.30, by the way, as of today.

Rabih Dimachki:
The current market price already reflects what we all expect. The return element comes when those expectations are different. So if we never expect Apple to have different revenues than what we already have priced in the price, if we don’t expect Apple to have different risks than what is already incorporated in this price, then the return will never change. This means if you buy Apple at $167, it’s gonna stay $167.

Ryan Isaac:
It’ll stay there, okay. That’s what’s funny about expectations. Let’s say they’ll have an expectations that they’ll have a certain earnings number, earnings per share. And they’ll come out and earnings, let’s say earnings just blows through the roof. They kill it, they crush it, but it’s not as high as they expected it to be. Then you’ll see people selling the stock and then the stock price will go down. Which is a funny thing, you’ll see a successful company post success, but it’s not as much success as the smart people following them said it should have posted, therefore the price will go down temporarily.

Rabih Dimachki:
And this is return.

Ryan Isaac:
And that’s return.

Rabih Dimachki:
We’ve had a negative return over the period between once we started our expectation and when the news came out.

Ryan Isaac:
Yeah, yes. And so we kind of need… It’s funny, as long-term investors, if I’m a person who’s gonna own thousands and thousands of diversified companies throughout the whole world, I’m gonna own it for decades, I kind of like the fact that there are people sitting at their computers and their phones daily pushing buy and sell because that’s what gives me my return. I should probably actually appreciate as a long-term investor people who also are long-term investors, but panic and do a lot of selling when all this news comes out because that’s what gives me a chance when I save every two weeks from my paycheck, that gives me a chance to buy cheaper stuff along the way all throughout my whole life. Maybe I should appreciate that a little bit. I shouldn’t be so mad that things go down, I should be like, “Thanks guys for panicking, I’m gonna pick up some cheaper shares today.”

Rabih Dimachki:
That’s one way to look at it. Another way, if you don’t want to actually be active in the market is, “Oh, thank you traders who are buying and selling because you are bringing the stock price to what accurately reflects current, the new expectations.”

Ryan Isaac:
Oh, yeah. When there’s enough people… I always try to put this to our audience in terms of buying a dental practice. See, when a dental practice goes for sale in a city, most of time there’s one seller, okay, so there’s one person selling the one piece of the asset, and then there’s three buyers. Maybe there’s five, sometimes there’s one, sometimes there’s two. Like it’s…

Rabih Dimachki:
How do you decide on the value of that?

Ryan Isaac:
How do you decide on value? Value then becomes whoever can strong-arm their opinion on the other people the hardest, whoever has got the most convincing argument, and whoever is the least desperate. That’s kind of where price lands. But what you’re saying is when there’s millions of people on both sides arguing with each other with their actual money, ’cause they’re arguing with their money, and they’re buying and selling. Then that’s what settles a price of what accurately reflects the value of the company at that moment in time.

Rabih Dimachki:
Exactly.

Ryan Isaac:
Which changes in 10 minutes.

Rabih Dimachki:
Changes in 10 minutes, so…

Ryan Isaac:
10 seconds, yeah.

Rabih Dimachki:
Because we agreed change in expectations is the return. The return is changing every 10 minutes, and that brings us out back to the whole conversation why you need a longer-term horizon because you need to make sure that change, that return over the long run, is in your favor instead of being on the other side.

Ryan Isaac:
So fascinating. Let’s chat about the things that are going on in the world that you started mentioning that people are worried about. And let’s just pretend for a second that everyone is a long-term investor and everyone’s gonna hold their portfolios, so this is pure education and entertainment. No one’s gonna go make any decisions based on this stuff, right?

Ryan Isaac:
But what can people… So one thing is you said interest rates could… We could see multiple rate hikes this year. I think that’s a consensus that rates will be increased this year, maybe even multiple times. What does that do? Again, we’re all long-term investors. I’m assuming no one’s gonna do anything with this information ’cause that would be silly, right? But what are some possible outcomes? Because, also, markets surprise us sometimes. Everyone expects one thing to happen, they don’t. What are some possible outcomes that come along with interest rate increases historically?

Rabih Dimachki:
Historically speaking, equity return stayed positive even during hikes, like interest rate hikes. So hike periods do not necessarily impact or guarantee that the stock market’s gonna be down.

Ryan Isaac:
Okay.

Rabih Dimachki:
The return doesn’t only depend on what the interest rate levels are. The return is going to depend on what the earnings going forward are going to be, and what’s the interest rate is going to be, what’s the inflation and how much companies are able to transfer over these rising costs to their customers, and it’ll depend on company-specific risks. So…

Rabih Dimachki:
Just choosing one variable and magnifying it. Assuming that if this changes, it’s gonna have a drastic impact on what the equity market is going to say, is mathematically inaccurate. And if we want to talk about the rising interest rate, the environment we’re in, we have to look at it from the perspective of the whole economy. The Federal Reserve is raising interest rates to fight inflation. Too much inflation will actually hurt cash flows and will make the stock price go down. Negative returns. And very high interest rates will actually slow down the whole economy, create a recession, and…

Ryan Isaac:
Towards this balance. It’s very delicate.

Rabih Dimachki:
So you have to imagine yourself as a car on a highway where you have to stay within the two lanes. And it’s a tricky job to do. That’s why…

Ryan Isaac:
I have a 16-year-old that I’m teaching to drive right now. And she drifts to the right like crazy. And so that’s exactly… That’s a great analogy.

Rabih Dimachki:
But I was just gonna go hit a car on the highway. And of course, it’s still fresh in my mind. [laughter] So it’s a tricky job that the Federal Reserve has to do to maintain the natural growth of the economy, within healthy ranges. Not too slow, where it can affect the stock market prices. And not too high, where, “This money makes nothing. It makes no sense at this point.”

Ryan Isaac:
Yeah.

Rabih Dimachki:
So given that we look at it from a macro perspective, you can start thinking that this interest rate hike that might hit the market for a couple of percentage drops down is actually a short-term pain to make sure we don’t go through a very long period of pain caused by high inflation. So which one are you gonna take? A current hit right now, or do you want your back to be broken for a couple of years later on? [chuckle]

Ryan Isaac:
I’ve have had back injuries. I don’t like them. So I’ll avoid the back injury. And you know what’s interesting about all these things too, is how something like just the general term of inflation, how that affects people very differently. I was reading a report… We should get it pulled up real time right now. I was reading a report on how inflation is measured across the country, from city to city. And it was this report from Atlanta, that Atlanta had the highest inflation of any city in the country during this measured period of time. And this got me thinking like a lot of us are gonna feel inflation in some ways across the board. But a lot of it’s gonna depend on the industries we work in, how we spend our money, how we get our income. A lot on how we spend our money.

Rabih Dimachki:
On top of that, unfortunately, the experience of inflation differs a lot between a consumer and an investor.

Ryan Isaac:
Yes. And an investor. And a company and a consumer.

Rabih Dimachki:
Exactly.

Ryan Isaac:
Totally.

Rabih Dimachki:
So as a consumer, inflation… We are all consumers in this economy. As a consumer, it’s not a good thing. Your wage might not be growing with inflation. But all the prices are growing with inflation. In real turns, you are not saving as much as you would have thought you were saving. The only time inflation might be good for a consumer is if their wage is growing at a real return, with inflation. But they have borrowed. They have a mortgage or they have a car loan that is not growing with time with inflation. In real turns, your debt is getting smaller. But beyond that point, as a consumer, inflation hits. Investor on the other hand, and this is a fact of how our economy works. Some companies have a bargaining power over the clients. If Walmart or Costco or Target decide to increase their prices, people who go and shop there for grocery every day, they’re not gonna stop. They are still gonna go and shop.

Ryan Isaac:
Yep.

Rabih Dimachki:
The fact that these companies are able to raise their prices is somehow trying to hedge itself from inflation. And it’s by passing on the cost to the clients. And investors in those companies, unlike consumers, are actually having their assets grow with inflation. So it’s a really different outcome, depending on whether you’re a consumer or an investor. But you can be both, which is great.

Ryan Isaac:
Well, and I like that you just said that. ‘Cause that’s what’s in my head, as I hear you talk about this, is the way to beat all of this, the only way to beat all of this is to be an investor. And man, you just illustrated it exactly. Because as inflation grows, the companies will respond. Because they’re not done. They’re not gonna let their profits and their bottom line fall too much. So values and prices increase. And if you’re an investor or you’re an owner with them, that’s how you also benefit from those increases. It’s too bad that we all just can’t do the same thing that companies do. And then we just go to our employers and be like, “I’m raising prices on you.”

Rabih Dimachki:
You can do it, Ryan. I can’t.

Ryan Isaac:
You’re a CFA. You can go and raise your… You can go ask for whatever you want.

Rabih Dimachki:
Oh no.

Ryan Isaac:
Yeah, that’s such a good analogy. And man, that’s the power of investing, and the power of investing now. Get started now. Don’t wait until… You hear this. And it’s very counter-intuitive. And it’s probably the only place that we behave like this as consumers. Any time anything else is cheap in the world, anything, Disney tickets, Costco… You mentioned Costco, Walmart and Target. Dude, if there’s a sell at Target, my whole family’s there. We’re shopping. The stock market takes a dip or has some uncertain times ahead, which seems like it’s every year. That’s always uncertain. But we start to take a dip. And people are like, “I think I’m gonna back off from this thing until it’s more expensive again.” It’s like, “Wait, what? No, no, no.” Get involved as early as possible. Save that 100 bucks a month, if that’s all you got. But be an investor as soon as you possibly can in your life. And do it as long as you possibly can. ‘Cause that’s how you beat all of this. That’s how you beat the ups and downs. ‘Cause you get through it. And that’s how you beat the ups and downs of inflation.

Ryan Isaac:
Matt, it’s time.

Matt Mulcock:
Time for what, Ryan?

Ryan Isaac:
It’s time to book a free consultation at dentistadvisors.com. Just click on the big BOOK FREE CONSULTATION button on the home page. And talk to one of our friendly advisors today. I like that you’re on this subject of the difference between a company, a consumer and an investor. There’s also a difference between the global or the larger scale macro economy and then the market itself. ‘Cause they don’t always behave in tandem. There’s times when our economy is technically shrinking. We’re actually in a statistical… What’s the word I’m looking for?

Rabih Dimachki:
Recession?

Ryan Isaac:
Recession. That’s the word. I was keeping… I kept thinking regression, I’m like, that’s not the word. Yeah, we will technically be in a recession, but those periods of time… And it’s like 40% of the time in history that markets actually grew during recessions, so they’re not always correlated like… And, right, I think right now is a great example of that, we’re two years deep into a pandemic, we had massive shutdowns, massive government spending, we have really high inflation, we’ve got rising rate environment, so we’ve got all these people not working, companies just desperate for workers. Yet at the same time, stocks have done really well, and they’re not always correlated exactly. I’m just curious if you have any thoughts on when markets and economies, they’re not always the same thing?

Rabih Dimachki:
They’re definitely not the same. And if you want to put them in their categories, the market is a subset of the economy and the market, aka, corporate profits, in a sense…

Ryan Isaac:
That’s all we’re talking about really, corporate profits.

Rabih Dimachki:
Corporate profits are in competition with other subsets that collectively make the whole economy. So companies are battling with imports and exports, in a sense, and they’re battling with wage, and there is an element of technology. There are so many macro economic models that try to explain which portion of the economy goes to which aspects, is it the market? Is it… And if the economy is not growing, think of it as a pizza, if the pizza is not growing in size, there is a push and pull in between on who’s going to be getting the bigger slice. Pre, I would say COVID and maybe the last decade. Economically speaking, wages haven’t been increasing much, but corporate earnings have been growing much. This translated into having a really great bull market, where if you just look in terms of growth, the market grew faster than the economy. Then COVID happened, and we are seeing all these supplies chain constrains, there’s a labor shortage. You go to McDonalds and it’s not fast food anymore it’s… You have to wait 20 minutes to get your meal.

Ryan Isaac:
[laughter] It’s not fast food anymore. It’s… That’s true, man. Yeah.

Rabih Dimachki:
It is true, this is causing the labor portion of the economy to start getting a bigger slice within this pie. And the fact that the market on one hand, labor on the other hand, international relations on the other hand, are all part of the economy fighting together, it creates… It would not be… Let’s put it in better words, looking only at the stock market is not a great indicator of what the economy is, and looking only at the economy is not a great indicator of what the stock market is.

Ryan Isaac:
I love that. That’s great because somebody, either as a consumer, an employee of a company, an owner of a company, can feel a different effect, they can struggle in an economy while crushing it as an investor. If we have those three categories: Consumer, Investor and Company, two of those can struggle while one of them is crushing it, like your returns can be just doing so well, above average historical returns, while you could be struggling as a business owner because you can’t find anyone to hire and you’ve struggled because of shutdowns, lockdowns, whatever. And it’s interesting how you can be on both sides of such a dynamic system.

Rabih Dimachki:
Just for the listeners, this is what Ryan and I talk about whenever we meet face-to-face.

Ryan Isaac:
Yeah, this is the best. This is why we like having Rabih around, and we hope we have him forever, because it’s just, these are the discussions… And I try to translate this to listeners and clients all the time. A simple approach to investing in the stock market, doesn’t mean it’s easy to do, and really the hardest thing to do. It’s not which fund should I use? I mean, go Google it, there’s free apps and free funds, and everything’s free, and everything’s here, go do all this stuff. The hardest thing to do on all this is you have to live as an investor, if you start investing like most dentists somewhere in their 30s, most of the time, but sometimes in their 20s, sometimes a little later in the 40s, but you’ve got an investing lifetime of easily 40 years, sometimes 50, 60 years. So the hardest part isn’t which half a dozen fund should I put in my account to have global allocation and diversification and have them low cost, like that… That’s nothing anymore. That’s not, that’s nothing. It used to be in the 80s, right, with stock brokers, there was a barrier to entry, like someone had to tell you what to put in there, that’s nothing anymore. Now…

Rabih Dimachki:
Exactly, because we didn’t have indices. Right?

Ryan Isaac:
Indices was nothing, yeah, it didn’t exist. But now the hard thing is doing that and then having all these things that we’re talking about, swirl around the whole world, your social network, your online network, your friend network, in your brain, in your emotions, in your gut and in your indigestion, and then not screw anything up while all of this stuff swirls around. And I will say from my experience, Dentist Advisor started 15 years ago, I’ve never had a year… I wouldn’t even say I’ve had a quarter, where there hasn’t been at least something of concern on the horizon that someone’s talking about, Never, never, ever.

Rabih Dimachki:
Always.

Ryan Isaac:
And you’re more… You’re watching this stuff… The first thing I do in the morning is not look at the market or the news, ’cause I don’t wanna be mad or depressed. [chuckle] So you see more than I do and would you agree with that? There’s never not a problem coming up in the economy or the world, right, there’s always something.

Rabih Dimachki:
Oh, because if there wasn’t, there would be no market…

Ryan Isaac:
There you go.

Rabih Dimachki:
There would be no stock market, the prices will never move and we’ll all be like, fishing. [laughter] No one will be sitting and no day traders will be there trying to squeeze some money and no hedge funds over there trying to create Alpha, no financial advisors, like us, trying to make sure we are as much… Spending as much time in the market as we possibly can to collect equity figures. And I think just to add on that point, that given the shift in the industry and what is valuable, right now it’s more of a commoditization, I know you guys always talk about it, it’s not the fund that you go to, it’s the investment philosophy that you’re sticking to, and on top of that, where your job is really valuable, and all of the advisors is the behavioral training to stick to the course, because it’s so hard to stick to something for 40 years, can you eat the same meal for 10 days?

Ryan Isaac:
It’s boring, it’s so hard to stick to it, and it’s much more enticing to all of us humans to just say, “What’s the magic portfolio that’ll do this quickly?” or “What’s the magic asset class that’ll do it for me?” That’s why they get so much momentum behind meme stock trading and new asset classes like Crypto, not saying that’s not a worthwhile asset class, but that’s why there’s so much fast excitement about it, because as humans, we’re wired to just wonder like, “What can shortcut this success?” “How do we get to the endpoint a little bit faster?” Real Talk with Rabih. This has been awesome. This is the first of many, I can feel it. Rabih thanks for being here, thanks for joining us. We’re gonna do this soon on our webinar, and I think we’ll probably just make this a habit, Real Talk with Rabih till I can find a cooler title than that. I think it’s awesome. So thanks buddy, very much, I appreciate it.

Rabih Dimachki:
Ryan. Thank you so much for having me, this has been fun.

Ryan Isaac:
Yeah, this has been. We’ll do it soon, everyone. Thanks for tuning in. And we’ll catch you on another episode next time The Dentist Money Show. Take care everybody. Bye-bye.

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