the 4 pillars of investing risk management: …risk management: module 1 the 4 pillars of investing...

Risk Management: Module 1THE 4 PILLARS OF INVESTING

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The 4 Pillars of Investing | Risk Management : Module 1

© Tanner Training LLC. All rights reserved.

Hello and welcome to Basic Risk Management. Time to get rolling. You and I have been together, I would imagine, though, this will be our fourth class. Is it? We went through fundamentals; we went through technicals, cash flow, and now, time for the most important topic, risk management. It really is.

They have a World Championship of Trading. It’s a big contest. Kind of like the World Series of Poker. Everyone starts out with the same amount of money and they go to town, see who can win it. I never entered it, I think I might some time. But, the guys that win it, it’s not that they just go lucky with picking stocks, necessarily. It’s a healthy enough contest that that’s not the deal. These guys manage risk.

I’ll have people come to me and they think they’re so smart and they’ll say, “Oh, yeah, I bought this stock and it went up so high. I was able to get options on this. It went up high.” Well, that’s no different than if you came up to me and said, “Well, I had a great night at the tables in Vegas last night.” People can get lucky.

My question is, how did you do when you picked the one that went down? When people, a man or a woman, can say…I was in this investment, the thing tanked on me, and this is how I dealt with it to minimize. Well, that’s what impresses me when I can minimize those loses. Anyone can get lucky and the stock goes up and make themselves a self-appointed stock picker in their own brain.

But really, as you get into this, risk management…that’s going to be it, man. Absolutely. Much more about this than any other pillar. You’ve got to have all four, but this is the big one, so we’re going to identify all types of risks, at least some of the common ones, anyway. And, they’re related to control, so we’re going to see that relationship. A lot of things, you can’t control, but we have to get that control back. Most 401K people, way out of control, just praying, just hoping, just thinking things might work out, hoping they do.

RISK MANAGEMENTMODULE 421 3

A transcription of

The 4 Pillars of Investing

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We’re going to learn how to use the computer to calculate some of these risks. Very cool software today. Very cool stuff I’m going to show you. And then work on our vocabulary as usual and we’re going to become aware of some of the techniques people use at the basic level. Might even hint to some of the intermediate level stuff you can do. I don’t know if we’ll get to any delta hedging, but we might talk about it. We’ll see how much time we have.

We’re going to discover how diversification can actually be dangerous. What? Andy is saying diversification is dangerous? Yep, that’s what he’s saying, and I think I have authority to do so and I’ll tell you why I think I do! I’ve spoken to a lot of people around this world, all over the world…unit trusts, mutual funds, diversified stuff…charge you a lot of money for that financial advice, but the bigger thing is, these people are going to bed at night thinking that they’re safe and that’s dangerous when you think that you’re safe and you’re not.

So, you’ve got to be educated on this and it’s a vital link. We’ll talk a little bit more about this. I think you really get it. I hope you’ve enjoyed it thus far in the series and found the insights that the educated have. So we’re going to keep moving along.

And, let’s talk about disclaimer stuff. In fact, I’ve got to manage my risk. It’s called Legal in the B. I. Triangle. Got to keep it legal. So, important disclaimer information. This class is on risk. Well, that’s good because all investing and trading in the securities market involves risk and when I make decisions to trade, I have to take those risks and manage them. If you make a decision to place any kind of trade, well, you’re going to have to manage that risk because it’s going to be your personal deal there. Your choice, not mine. These are educational products. We don’t do financial advice. You know that! And we’re not engage in running legal accounting or financial services.

So what are you going to do? Are you going to build a team of qualified, licensed fiduciaries around you…planners, financial advisor representatives, stuff like that, to help you manage some of this risk. But, we’re going to give you some education so you can speak better with those guys and gals, and it’s going to be awesome. With that said, I’m going to say, “It’s for what?” You know it by now, what is it for? Well, you know…by now you know…it’s for grownups. That’s right.

Where are we on the continuum? Well, let’s take a look here. Let’s see, we are no longer in the ignorance phase, I’ll tell you that. Little or no education? You’re on your fourth class, so you’ve got some education. Hopefully, you’re going to be able to be hands-on pretty soon instead of just hands-off. We’re going to continue with the last of the basic classes. You’re moving on here next. That’s awesome!

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Strategies? We’ll cover them. Vocabulary? We’ll cover them. Improve our context…how we think. And then we’ll move on the confidence proficiency. Hey! You’re a third of the way there. You’re through phase one after today. You’re going to start phase two. Awesome stuff. Congratulations!

So, let’s see the four pillars. We did fundamentals. Strength of an entity, right? Personal. Corporate. Sovereign. Technical analysis, strength of the market…that was way cool. Dojis. Handles. Western indicators. Eastern indicators. Fun stuff. Cash flow, we talked about earning money up capital gain, down with shorting, sideways with time decay. Cash flow strategies. Income. And then risk management’s today.

Expect the unexpected. Boy, there are a lot of risks out there. A lot of risks to manage. Most people don’t know how risky it is…how fun it is to manage risk. You know what? I have some scouts and we will take those scouts to the range and we will show them how to manage risk. We’ll show them how to shoot a firearm sometimes. You know how we do it? Massive. Intense. Absolute, unbreakable rules. And, if there’s ever an accident, it’s someone broke rules. It isn’t because the risk wasn’t manageable. It was that they decided not to manage it.

So, we have to manage that risk and we have a good time. We learn a little bit about handling things at risk. Driving a car…it’s got some risk out there on the freeway. If we keep our eyes open and drive defensively, wear our seatbelt, and keep our speed at a reasonable amount. Oh my heck! If I get this on to any type of recording, my wife’s going to hold it against me. OK! I’ll do it! I’ll slow down! I will.

You catch the drift. It’s manageable. You can put a 747 up in the air. A million pounds, those weigh. Forty thousand feet, 500 miles an hour. Sounds risky to me. But, you know what? You get some education, you can manage it. So, that said, let’s work on our vocabulary, should we? I think that’s a good way to start.

We’re going to start by identifying several different types of risk. We’ve hinted them to you throughout the series, but now, we get to talk about them in a more detailed way. Let’s start with something called non-systemic risk. In your notes, you can circle that, or like I said, just kick back the first time. Go through it and just listen.

We’ve got non-systemic risk here. What is that? One day, and you guys know this…that one of my great mentors, tremendous respect. He’s taught me so much and the other advisors. The risk debt advisors, and also Robert and Kim Kiasaki. They’ve taught me so much.

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So, I’m in Florida, right? I’m sipping on a drink, like this. We’re on vacation with my family. I remember that Robert calls me and says, “Hey, Andy. Did you see the news?” I said, “Yep, I saw it.” There was an oil spill in the Gulf of Mexico. A big oil spill. One of the initials for the company? Come on, we did this already. BP, right? What does it stand for? Broken Pipe. No, it stands for British Petroleum. They spilled that oil and Robert says, “Hey! What do you think? How are we going to make some money on this?” This was trading at sixty dollars a share up here. All of a sudden, oh no! Here we go…couldn’t clean it up. Oh no! it’s getting ugly. Now you’re at thirty dollars. It’s cut in half. A person realizes that if they put money in the stock market, things can happen.

Toyota had some cars. You push on the gas pedal, it goes forward. You take your foot off the gas pedal, they still go forward. That’s time for a recall. That’ costs us money. That causes stock price…

You know what’s interesting? Over the summer, hey, we weren’t having the whole stock market go down. In fact, you know what? The stock market was looking like this. So, the whole system here…we’ll just say system…was looking pretty good here. It was just this one company that was struggling, right? It didn’t affect…the rest of the S&P was going up like this, see? That’s called a non-systemic risk. It didn’t bring the market to its knees. But I tell you what, if you were at BP, you were brought to you knees like that.

So, you’ll sit down with your fiduciary. Fiduciary means that we’re supposed to act in your best interest. Often, they act in their best interest, and I don’t blame them. They’re going to protect themselves in this litigious society. I would say, “Hey, you better be careful, you better not put all your eggs in one basket.” What do they call that? You better diversify because if I put all the eggs in this one basket and someone smashes this box, then all my eggs break and that’s not going to be cool.

We diversify. Like I said, that can be risky too. I’ll tell you why. Here’s my beef with diversification. Diversification says, look, if you put all your money in BP, bam! Half your money is gone, so spread it around in the market. Spread it all around the market and that way, if you’ve only got a small amount of money in BP, and the rest of your money is spread around the market, it won’t hurt so bad. It won’t be nearly as bad.

OK, I’m fine with that. No problem. But doggone it! What bothers me is I’ll ask people around the world, “Do you feel you’re conservative or aggressive.” They’ll say, “I’m so conservative.” I’ll say, “Why are you so conservative?” “Well, because I’m diversified. Very diversified. I don’t go for big returns, and I’m diversified.” They feel that that manages risk like it’s the only risk that’s there. Diversified, that’s the answer. I’m telling you, what about all the stuff we studied?

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It’s like a flu shot. Flu shots are only for the flu. They don’t offer protection against heart disease, or against cancer, or against all the host of things…malaria…all these things that can go wrong. All these people get diversified and they go to bed at night and they’re all happy and they’re sleeping sound because, “I’m diversified! I’m protected!” No, man, it’s not a panacea. You are addressing one type of risk and that is it. You’re addressing non-systemic risk only. It does not offer protection against what? Oh, if there’s going to be something called non-systemic risk, there’s also something called the systemic risk.

For example, let’s put them side by side. Over here, we have a story of a bad thing that happened to a company. Over here, we have a story of bad things that happen to a market. Did you catch that? It can happen, the whole market.

Remember this? Alan Greenspan lowering those interest rates, getting people to borrow money easily. If you can borrow money, what are you going to do? You’re going to spend that money? If you give people the ability to borrow hundreds of thousands of dollars, they are going to buy houses. If everyone is flush with cash and flush with loans, everyone wants to buy houses…that’s creating demand and that’s going to drive the price of those homes up. The next thing you know…Pop! There goes the real estate bubble and the sub-prime mortgage meltdown in full swing.

Look at this right here. Over here, OK? Let’s get the marker out. Over here, you’ve got BP. That’s down what? I’d say that’s half the money gone. Let’s put a little 50% here. Negative 50%, right? Over here, we’re at 14,000…down to 700. That would be what? Negative what, people? You can blow up your account at 50% either way, baby, through non-systemic problems or when the whole system is whack. This happened in 2001 with the dotcom crash, right? Down it went. Happened again here in the sub-prime meltdown. Sure not looking good here right now where we sit. Hopefully it turns around for all these 401K guys. I don’t care which way it goes, but I sure hope it goes up for them because guess what, guys? That’s systemic risk when the whole system is screwed up.

You remember what we talked about? This is why we did sovereign fundamental analysis…so we can learn more about systemic risk. Remember all this stuff we talked about? Printing all that money. Remember that? Printing money. Do you think that is non-systemic? Do you think that just affects one company? I say that can mess up the whole system.

Oh, remember this income statement? This financial statement that’s been on the sheet for the USA. Is this going to affect one company? I say that’s systemic.

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Remember the Nikkei? We talked about Japan and the Nikkei. I’m circling too much stuff. We talked about the Nikkei. Just keep on one thing…how that sucker has gone, actually, down. If you go on 1984 down to today, it’s lost 14% in the last 27 years. That’s the whole system. This has got Toyota in it. It’s got Nintendo in it. It’s got Sony in it. It’s got major companies in it. They’ve stunk for thirty years over there. That’s not one company that’s stinking over there. That’s the whole system.

Even if Sony had done great or Toyota had done great, you’re not one or two companies, you’re diversified. Could be a type in the shadow. They have the same policy. Remember their debt to GDP was what? Two thirty-five? Ours is headed for what? Are you out of your mind? Holy cow, government, are you guys crazy? Three hundred percent GDP, that’s where we’re…these guys are at two fifty, I believe. Something like that. Two fifty, I think we said. Two thirty. Yeah, two thirty-four, I think it was. Two, three, four. And these guys here, we’re looking for three fifty. Is this going to affect one company? I don’t think so. I think it’s going to be systemic.

Oh, remember the European debt and the market fell today, huge. You kidding me? It fell today big time. In fact, look at this. Let’s just take a look here. Let’s see if I can figure this out. Remember I used to struggle with this, but now I don’t?

If we look at a chart here, of today. Let’s just look at the Dow Jones Industrial average. INDU baby. If I wasn’t worried about all the copyright stuff…look. Another down day here today. Another down day. Why? Fears in Europe. If I didn’t have copyright issues, I’d go to the newspaper, I’d show you right there, but hey, you know it’s true. You know what we’re doing. So, we’ve got all this debt in Europe in those credit default swaps, and what do we do? We measure risk with insurance, remember that? If we see insurance premiums riding, that means that risk is going up. I tell you what, what type of risk is that? That’s systemic, I believe. All this stuff. I thought it was kind of fun.

The boat is sinking systemically, that’s for sure. We know that’s the case. I don’t know if they’ll be able to plug that hole or not. Germany is thinking they don’t want to. Germany over here, they’re saying, “Hey, our GDP is fine, we don’t want to bail out Greece.” Italy, those guys, holy cow…they’re saying, “We don’t want to do austerity, we want to keep spending and borrowing.” The European Union is saying, “Hey, you guys.. .” We’ve got the European Central Bank saying, “Hey, you guys have got to shape up.” So anyway, this is systemic risk, right? We want to address…you might say, “Andy, how are we going to do this?” We will.

Now, purchasing risk is another one. We have non-systemic, systemic, and purchasing. We talked about this; I just want to review it quick. Look at the dollar. This is an ETF of US dollar and that baby has been hurting, hasn’t it? Down we go. That’s kind of rough. Here we have what? Gold’s been going up because people are scared the dollar is going down. You put money in the bank

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when gas was a dollar a gallon. You put in one dollar. That’s going to stay one dollar, even though now it takes ten of them to buy gas. You’re not able to what? Purchase. That’s why we call it purchase risk.

Those are the three big ones you ought to know right now. Here is what you can say to your advisor. In fact, you should write this down. “Thank you for meeting with me about my money. I see that you have addressed the non-systemic risks with diversification and mutual funds. Wonderful, thank you. However, when I look at the price of credit default swaps…when I look at the sovereign balance sheet of the United States…when look at the monetary policy that’s mimicking Japan, the Nikkei, and that’s been stagnant to death and down for thirty years…when I look at the debt to GDP ration, the trajectory of the United States…when I look at the price of sovereign credit default swaps…I look at what’s going around in the nation, what are you doing to manage the systemic risk?

Not only that, since we’re printing all this money and there’s all this quantitative reason going on, I think that it’s likely the dollar could fall and certainly the technical of showing the dollar’s been falling…so what are you doing to manage the purchase risk?

Are those legitimate questions to ask your fiduciary? I think yes because why? Because the data of the fundamentals and the technical say we should be asking those questions. What are you doing to handle those risks? And by the way, there’s more. These are not as in-your-face, I think, but they’re things we think about. Blockbuster Video. Remember? They were stinking because they’ve become obsolete. They’re a victim of obsolescent risk, as was the eight-track tape, as was the LP.

Some of you listening to this don’t even know what the RPM is. It’s 33 1/3 or if you’re really into it, you’ve got your 45’s on. I know what 45’s are. I’m not that young. Not that old either.

So anything that has to do with technology…there’s something about this…you’ve got…let’s say P&G make Charmin. I believe P&G makes Charmin. Not a whole lot of technology going into Charmin, right? But Sirius Satellite Radio? Which one is more likely to become obsolete? Are you going to come out with cooler toilet paper? Not a lot of R&D going into that. I think we’ve figured the TP thing out. But Sirius Satellite Radio? Apple is just a technology killer, man. Apple comes out with the iPod or the podcasts…bam! They come out with iTunes…bam! Sirius Satellite Radio, you’re done. They come out with AppleTV…boop…downloadable movies. Blockbuster, you’re done.

New technology…obsolescent risk. I’ll tell you what, Apple has obsolescent risk. Who knows who isn’t going to come around, I mean, Steve Jobs, he just retired. He’s done. Can they keep that thing

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going? I don’t know. Maybe they can. But they have obsolescent risk now, too. Google wants to take them down. Microsoft, maybe they make a run.

Geographic risk. California is always on fire. It’s not news when California is on fire. It’s news when they’re not on fire. That’s what it should be. Can you see the newscaster? “Today…California was not on fire today.” Holy cow! That’s news! Florida has oranges. If they get a freeze, that’s going to affect it. They have that geography feel. See that? Different parts of the country have different risks based on geography. Down here in Columbia, they have coffee. Geographic risk.

Interest risk. If you’re in the bond game…now, if you hold things to maturity, you hold things to maturity…but if you’re in the bond game, that can affect interest. The rate.

Political risk. This is the United States. This is Iraq. Fighting for a long time. You can put Israel on there. You can put Iran. Are Israel and Iran going to dance? I think they are. Will Iran get a nuclear weapon? I don’t think so. Why? I don’t think Israel is going to let them because those guys don’t mess around. They’re tough over there. They’re not going to take any guff.

If there’s a war in the Middle East, big surprise, that can affect the price of oil…that can affect tensions. Oil, that’s it. That leads into systemic stuff. This is…political problems…labor strike in China…political type of stuff. So, we’ve got to think about those risks. Fiduciary going to help you there? I don’t think so.

How about longevity risk? This is huge for pensions. As people age, as they outlive stuff…I’ll tell you what. You’ve got these defined benefit pensions? Even those are underfunded. Hey, it’s not like I’m a big fan of those. You know I hate the contribution plans. I think those are hurting people huge. Even the defined benefit pensions, you design the pension where the Actuarial Table says the guy is going to die at 76, 77. Now people are living into their 90’s…Healthcare costs going higher. The longer they live, the higher the healthcare costs. You’re going to define benefit pension? You’re going to have to pay them out? Longevity risk, that’s scary for insurance companies…pensions. Longevity risk. People living way long.

Legislative risk. Hey, look at this S&P downgrade. That was a result of legislative risk. That can be systemic in nature. The Fed…they don’t re-legislate, but I think I can put them under that umbrella. People making decisions on fiscal monetary policy.

So, this is just a small…there’s so many different kinds of risks out there. As you become more and more involved in investing, you’ll learn them. I tell you what, the big ones are what? Non-systemic risk…you get into one company. Any time I get into one company, man, I’ve got to

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think…for example, let’s go with pharmaceuticals. You’re going to buy some pharmaceutical…FDA approval…is it going to come out and bomb? Is it going to come out and cause cancer when it’s supposed to cure it? FDA approval. I’ve got to watch that.

Earnings announcements. You can trade research and motion and that sucker’s going to gap five bucks one way or the other on you. Don’t want to be screwing around on earnings, right? That’s a non-systemic deal. If I’m going to trade an individual stock, I’ve got to think non-systemic risk.

If I’m trading ETF’s or instruments that are broad-based, I’ve got think about what I’m taking. I trade a little Russell 2001 Skin, we’ll write some options on that now and again. That’s a systemic deal, isn’t it?

And then purchase risk. Got to have that in mind too. How can I protect myself against the dollar going down in value? Maybe I use some precious metals to help manage that.

So, those are the big ones, right? Non-systemic, systemic, and purchasing, in my opinion. But there’s all other types of risks you can…you know…there’s credit risk. Let’s say I loan someone money and they don’t pay me back. If you’re in the corporate bond game, what if they don’t pay you back? Maybe they’re credit risks.

All types of risks that we’re going to manage. So, how do we manage this stuff? Well, we’re going to attach it and let’s figure out how we can manage risks. It’s got a lot to do with control. See, first of all, we have to understand that risk is related to control. The first thing that frustrates investors is they get in the habit of hoping things work out.

I hope this girl will go out with me. I hope I don’t have this or that. As soon as you use the word hope…as soon as you feel hope, that means you’ve lost control. That means you’re gambling…hope that I draw a black jack. Gee, I hope I draw a King. I hope I’m not sitting here with a 16 and going to draw a face card. Those are the types of things that are beyond our control.

Watch what we say. I hope unemployment improves. Hope the government does something about this. Out of your control. Gee, I hope my stock comes back. I own Lucent Technologies and down it goes. I own WorldCom or Enron, or Delta Airlines, or United Airlines, or GM, or AIG, or even Microsoft, right? I hope the stock comes back. Hope I can retire someday. Hope the market recovers.

Powerless! Absolutely powerless. Risk-takers…no control. So, risk is related to control. Remember this? Hoping, or building? This guy’s got control. Love that slide…had to put it in this one too. Risk is related to control.

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What are some of the things we don’t control? Number one, we can’t control the stock or the market direction. The stock and the market do whatever direction they want. Can’t control it. Major events. I can’t control a tsunami in Japan. I can’t control a tidal in Japan. I can’t control and earthquake in California. I can’t control Hurricane Katrina. I can’t control, even events we know about. I can’t control FDA approval. I can’t control earnings reports. I can’t control any of that stuff. Certainly can’t control sovereign issues, like debt, fiscal policy. These are things you can’t control.

If you’re in a mutual fund, all of these impact you and you do nothing about it. You just sit and say, well, I hope it works out. I hope it works out, you’re taking a lot of risks, sitting there, betting on the long-term diversified portfolio that everything works out and everything’s rosy. Hey, things aren’t always rosy. Hey, they work out. The data is saying it’s not really working out. Especially not in the last ten years, and for Japan, not in the last thirty. So, that’s a wakeup call. But, there’s a lot of things we can control, guys. There’s a lot of stuff I can control.

First of all, I can’t control where the market goes up or down, but I can control what cash flow strategy I use. I can control insurance. You can’t control whether your house burns down. Yeah, you can try to be safe, you can try to put a smoke alarm, a fire extinguisher, don’t play with fire, all that stuff. I tell you what, by lighting while you’re on vacation or something weird happens with your wiring, the house is burned down. Accidents happen. What do you need? You need insurance. Not hope, insurance.

So, look at this. Whenever you have something you can’t control, insure it. Can’t control Hurricane Katrina, but I can have insurance on the house. Can’t control tsunami, but I can have insurance on my business. Can’t control a market crash, but I can have insurance or a hedge on my portfolio.

Ahh! So I see! If I can’t control it, I need to hedge it. Yep, that’s a big secret right there. I can control my personal fiscal policy. Can’t do anything about the sovereign stuff, but there’s other stuff I can do, too. I can get an exit strategy. I control whether I own it or not. I can control whether I sit and watch it go down or whether I sell it immediately. I have total control on that. That’s the irony, man! Think about that! Business? You’ve got this huge inventory…million dollars…how do you sell that? You’ve got this huge real estate development that’s not doing well, how do you sell 12 units? How do you sell 500 units? Get out! Here, click…click of a button is liquidity.

You control whether you’re in or out. Totally your choice. That’s nice. I can’t control whether the Titanic goes down, but I can control whether I choose to get on without a lifeboat. The Titanic’s not even a story if there’s lifeboats on there. Problem is, people had no control on getting off. So I can decide whether or not to get on a ship with a lifeboat, whether it has an exit strategy. Gee, that makes sense. I go into a room; I should be able to get out. I should probably have a way to get out. I

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go on a ship; I should probably have a way to get off. I put money in; I should probably have a way to get it out, either through an exit or a hedge. I’ve got to choose that.

How big of a position am I going to take? We’ll learn how the casinos do that. Very smart. That’s one of the huge unfair advantages that they have as they control the position size. We’ll study that. That’s a huge secret. In fact, one of the advanced classes that we recommend you take talks a lot about position size and how to play that game. That’s a great, mathematical, sound, solid deal right there. You’ll see how big that is later.

I control whether I’m in non-correlated allocation, or correlated, or inverse correlated. I can control my asset allocation, can’t I? And another thing…if there are some things we can control, then we need to focus. If you can’t control your house burning down, you can control the insurance, right? There are ways to regain control. I hope a hurricane doesn’t come. Well, that’s not a good thing. I’ll buy insurance in case it does. Oh, OK, now I’ve got control back on that situation. At least money-wise.

So, whenever you don’t have control, you find something that helps you regain that control back. Risk is ready to control. The amount of control you have over your investments is telling you how much risk you have. Yeah, I hope my house doesn’t burn down. It’s true, I hope. But I’m also glad it’s insured and I know I’ll get an insurance check if it does. That’s not something I’m hoping. It’s not…I hope I get an insurance check. No. It’s…I know I’ll get an insurance check. Big difference between hope and knowing the outcome. If you can get insurance, then you know the outcome. Either you don’t get into…either your house doesn’t burn down or does and you get a check. Now I know both outcomes, I don’t need hope. Very powerful concept.

OK. So, risk is related to control.

Financial education. That’s a huge, huge one as far as you can control whether you invest in ignorance or whether you invest as an educated investor. That’s my choice. That’s your choice. Together, we can choose…that’s totally within our control of whether we go into the market dumb or whether we go into the market smart. That’s something we can control. Very important.

Can’t control whether the politicians are financially educated. Can’t control whether your broker is financially educated. I guess you could, you could fire them. Or, you can interview them and ask better questions. I don’t think you should fire him and do an upgrade. You control who you work with so we can control our financial education.

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OK! No control, fundamentals and technicals. Going to review what it is…cash flow risk management, we control. We can choose how to harvest the stuff. So, let’s talk about some of the ways we do this.

END OF RISK MANAGEMENT – MODULE 1

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