Investing With Confidence and Purpose — Moneyball!
Any long-term goal must be based on a solid premise. For True Wealth Management, the goal is for investors to live the one life they have with confidence. Its premise is a seemingly obvious metaphysical fact — the only thing that can go out of existence is that which lives. For this reason, every living thing has one primary purpose — to live, and every element of its being is designed for living.
Because our postmodern culture ignores this, investors have difficulty taking ownership of their futures. Making decisions about the life they aspire to and taking the necessary action is not easy. To help solve this problem, Poetic Justice Capital has created an investment advice and service model that meets our client’s needs, is easy to use and understand, and is reliable.
For the 2002 Oakland Athletics, the solution was Moneyball. Their need was to become profitable by winning games, their easy-to-use system was SABRmetrics for inexpensive talent, and its reliability was proven by winning the division over a long season. By controlling what they could control, and integrating their spending goals, the A’s achieved the lowest cost per win.
For our investors, the process is identical. We begin by establishing the values and aspirations that define lives of purpose. Next, we examine current and future resources, then identify potential hazards, and lastly implement the strategy. This last step is the combination of talent with a high probability of success and low cost in terms of risk exposure and fees.
While the SABR stands for Society of American Baseball Research, in the world of finance, we rely on the Nobel Prize winning research of Harry Markowitz’ Efficient Market Theory. This is supported by Austrian School economist Ludwig von Mises’ preeminent work on market economies, price theory, and purposeful human action.
Accordingly, we do not select talent using the common metrics of traditional investment advisors. On Base Percentage is the Moneyball metric, and in our case, it is maximum correlation to the asset classes we want to own.
In addition, we avoid faulty risk tolerance questionnaires, arbitrary asset allocation strategies, and ineffective rebalancing. These merely generate unecessary activity and risk, not dollars of future wealth. In its place, we engage in strategic rebalancing when our client’s confidence level becomes overfunded or underfunded.
In other words, we are flexible with strategy, and will reduce or increase risk exposure when warranted — objectively. This allows the clients of Poetic Justice Capital to anticipate the possibility of extreme market events — before they occur. Think about that. How useful would it be, and rare, to have a fallback plan in the event of a severe market downturn?
Unlike market forecasters, we do not predict the future. Instead, we respect its uncertainty and strive to anticipate the possibility of severe market volatility or other life events. This helps give our client’s cash flow, investment strategy, and lives newly discovered confidence and purpose — as an integrated unit.