Laura Glenn is a director of investment advisory services for Public Trust Advisors in Atlanta, Ga. She is responsible for providing customized investment management and administrative and advisory solutions to public sector entities across the U.S. She graduated from HCOB in accounting.
Laura Glenn is a director of investment advisory services for Public Trust Advisors in Atlanta, Ga. She is responsible for providing customized investment management and administrative and advisory solutions to public sector entities across the U.S. She graduated from HCOB in accounting.
Narrator:
Welcome to the Harbert College of Business podcast.
Sarah Gascon:
War Eagle! It’s your hosts Sarah Gascon and Currie Dyess. Thank you for joining us today on another episode of the Harbert College of Business podcast. Today we are joined by our special guest and friend Ms. Laura Glenn. Laura is the director of investment advisory services at for Public Trust Advisors and former senior portfolio manager for the state of Georgia. We are so happy you all could join us today as we discuss the importance of education, using your gut as your G.P.S., and the differences between the current financial crisis and the 2008 crisis. Laura, thanks for joining us. Tell us a little bit about you journey to Auburn.
Laura Glenn:
So I grew up in Atlanta. Actually I was born in Asheville, North Carolina, but only lived there for less than a year, so consider myself from Atlanta completely. Most people here honestly would probably choose Georgia or Georgia Tech and this was prior to... I always say if my dad... Oh, I can't think of the name of the scholarship. HOPE scholarship, if it would exist and my dad, even though he saved money, he would have been like, "Choose one of those two schools you're going." So luckily that wasn't around or I never would have [inaudible 00:00:41] at Auburn. But I went down there on a fluke. I think I shared with you all that a girl that I wasn't even really close friends with, invited me to go to Auburn for the weekend.
I was like, "Yeah, that's fair to do." So we went down the weekend of the Auburn-Tennessee game and back then they used to shut down fraternity row and you could walk up and down on game day after that. I remember just thinking, "Oh my God, this is the greatest place on earth. Forget Disney world. This is the greatest place." I had decided that's where I wanted to go. My mom's like, "Well, maybe you should look at small schools in North Carolina, like an all girls school." And I was like, "No. I need book halls, I need a football team. I need a big school."
I applied to Auburn, got in and I didn't even... My mom's like, "Are you going to fill out the rest of those applications?" I was like, "No. No reason to." So anyway, that's how I got there. And it was great. I landed down there without anybody. I mean, I didn't realize it until I think after the fact that there were a few folks from my high school that went there, but I wasn't really friends with them, so we didn't connect while we were down there. And so right on day one, I always tell people, it was fun. I moved into the dorm and I met girls from Florida and I met people from Louisiana and Alabama and all over kind of around the Southeast. And it was great. You kind of truly got out of your comfort zone. I was kind of tired of being everybody I knew I'd known since first grade. So it was kind of a nice restart for life.
Sarah:
So you started off in journalism and communications and then switched your major to accounting.
Laura:
I did. Never really did I sense, would've graduated with accounting degree, never really done it and have done anything with that. No offense to the accounting department. I always tell people it's a great background. It really was. Even if you're not going to be a CPA, if you're not going to do any type of accounting work, I always had that as a background and understood it. I definitely utilized it in the roles that I've had since been in the investment area. Auburn has served me well. I think the background, the education I got, the connections, all of it. I would tell people, "You don't have to be a CPA. Get the degree and go conquer the world." Right?
Currie Dyess:
I think I read something like 80 or 85% of fortune 500 CEOs have accounting backgrounds.You said it's a good background to have, but why is it a good background if it's something you don't actually go into, like being a CPA?
Laura:
I think if you're going to be like a CFO of a company or you're going to be in any type of financial, just to understand the financial structure of companies, in investments to understand, pensions, to understand how... Like right now, if you're going to be a banking analyst to understand how to read a balance sheet, how a cashflow statement works, how that impacts a company. I just think it's huge.
Currie:
What is a CFA? You talked a little bit about, you're doing your CFA. What is a CFA and how did you land on the decision to do that?
Laura:
Sure. It stands for Chartered Financial Analyst and I decided to do that because I think I was hitting mid 20s, been out of school for four or five years. I spoke with my boss and said, "Hey, I'm thinking about going back and getting an MBA full time." Which obviously now is an even more costly endeavor than it was back then. I said, "Or getting my CFA." Because he had both an MBA from Emory and then a CFA. And so he said, "Well, do you want to stay in investments?" I was like, "Yeah, I really like it a lot." He said, "Do you ever think you'll switch to any other type of business and get out of investments completely?" I said, "No." And he said, "Well, then I would recommend the CFA." Because, it's an at-home study. The bank paid for it, if you... Actually I took it when I was at the state. So the state would pay for it versus wouldn't pay for an MBA.
So it's about two grand. The books were pretty expensive, at-home study program. So the only thing is you have to be self-disciplined versus an MBA, you got to go to class. There's some self-discipline coming home, doing projects and studying at home, but it was pretty much all from home. So it allowed me to do that and you'd take it where you, if you pass level one, then the following year in June, you sit for level two and then the following year past two, you take three. The industry that I'm in, it's very highly recognized. Most job descriptions are gonna ask for a CFA and I tell young people coming out of school, "Definitely take it, right out of school because a lot of the work that you're going to see and do is probably you've done it. You've just taken a class on it at Auburn. You've either seen it in a finance class or accounting class or economics class."
Also the longer, I think folks wait, once you get into married, children, it's a lot of outside of work time. A lot of folks that I know who had never really completed the program is because it just was a time suck. They couldn't be at their kid's baseball. They couldn't be a dad and raise kids and try to study, because there was that guilt and taking time away from your kids. So I always tell people do it and do it young and do it right out of school when everything's still fresh in the brain.
Sarah:
What do you enjoy most about investment banking?
Laura:
I'm a huge people person and that's probably true about any business that you're in. It's really just, I've met some incredible folks along the way and I enjoy and that in the space that I played in before the role I'm in now, I really get a sense of being a steward and helping folks. Because most people that were working at the cities or counties that are helping didn't have an investment background. So they're running public fund money. That's true community money. It's making a difference. It's tax receipts coming in that is being spent in the communities that they represent. So really kind of helping those folks and getting to have conversations with people on the phone and realizing that you're helping them. You're also getting information back, I've made some wonderful friendships, either people in New York that covered me on the sell side or the people that were my work family, throughout the time, just there's some really, really great people in the industry.
Sarah:
So, what is your processing to determine how to invest your money or where to invest your money? Do you follow a specific model?
Laura:
No. So I've always played in the fixed income space. So when people meet me at cocktail parties, I'm not really exciting to talk to. Because I'm not going to tell you that Tesla is hot and you should keep going in or that Peloton is going to keep going up or that Apple is a great stock. So really, I played in the very short end of the yield curve. So like a lot of pension fund and long term money, going to be investing out 10, 30 years. One year and in, but very tied to what the fed is doing. You're betting on what the bed's going to do. Is the fed going to raise rates? Are they going to raise rates with this meeting?
The fun thing isn't I think in investments, going back to the previous question is the mark is always changing and it's changing every day and it is not the same job day in and day out. It's constantly changing, right? If you're an equity analyst or you're in the equity markets right now, equity market doesn't make sense, right? I mean the economy is doing poorly, but then you would not gather that from what the active equity markets are doing. It's constantly changing. We were just on a call the other day with work and laughing that everything they've probably ever tell you at Auburn in an equity analyst class, throw that out. Fundamentals don't matter anymore. It's just with the fed in play that people just have to find... They'll take on risky assets just because they need you. So it's fine. It's always changing. And just when you think where things are headed, it's completely different.
Currie:
How long are we going to be like this?
Laura:
Oh, I don't think we're going to see the full impact yet. The banking sector, I think, a lot of people will have been allowed forbearance on their home loans, I think. If you look at the stats, so many people drop their iPhones. They can't afford that service or they're not paying for that service. So I think small things like that haven't fully played out yet. If we don't vote to give the $600 additional payment for unemployment, that's going to be a huge impact on our economy. So I think we're going to still feel this for a year or two years to come when the economic crisis happened in '08, '09.
A lot of tax collections for municipalities are based off the property taxes of, the assessments on homes. So those fell and they fell dramatically, especially when you had a lot of builder foreclosures. That bled into our economy for years after that. They slowly could raise property value, which slowly raised taxes, which slowly led to more services being offered. And we finally, I think we're in a much better state before this happened with banks were under greater regulation. They're in better shape than they were before the crisis in '08, '09 or nine homeowners or just the consumer is in a much better position. Right? I don't think as many people are as leveraged with their homes, they haven't... The banks didn't allow them to take out home equity lines and go buy a car or a boat or a second home.
So, we'll see. But I think it's going to be... I don't think it's going to end when a vaccine comes along. Because, there is definitely going to be some pain from the drain. Right? Of people's bank accounts being drained that didn't have income. A lot of people are getting to where, "If this runs out..." If you watch the daily news, people are like, "I'm living right now because I have a $600 weekly payment on top of the normal unemployment payments."
Sarah:
So let's talk a little bit about the 2008 financial crisis. A lot of our listeners were very young during that period. Could you explain a little bit about that experience and how you navigated through that situation?
Laura:
Sure. That's where I... Going back to what I just said, I think a lot of people... It's as general as we're living beyond their means, the banks had no problems making loans, for someone to buy a five or $750,000 house that made maybe $50,000 a year. On both parts, I think the banks were greedy, they wanted to make the loans, but the government also allowed them to do it. Because, what happened was the banks could sell these loans off of their balance sheets. They could securitize them and then investors were buying those.
If you can do that all day long and I'm not going to pick on any particular bank, but if you're bank A, and you can do that, you're just going to write a loan. They weren't even taking documentation. They weren't even looking at what your W2 was or how much money you had in a checking or savings account. It was just these no documentation loans. And they were just loaning money to anybody and everybody.
Then a lot of the securities that they were selling off had a AAA wrap around them because S&P wasn't really looking into the underlying loans and what they were doing. And so it just all... Excess is always built. It always leads to some type of recession. There's always some type of bubble. So this was kind of a housing bubble that led to that, that you had to build up in, where all of a sudden for the banks, it became a liquidity problem. Because what happened was the banks, instead of funding themselves with longterm liabilities, where maybe they came to you and said, "Hey, let's get your money and pay you for 10 years, for 30 years." They had overnight money and that money can leave quickly. So what happened was you had the likes of the Lehman Brothers and Bear Stearns that started to crack.
You saw that. Luckily for us the guys who were looking at the longterm credit, didn't see it like we did in the front end space, because all of a sudden the market was trading, I think that bonds were at five and a half percent. And all of a sudden Bear Stearns was like, "I'll pay you 5.55." Which doesn't seem like a big spread, but you're like, "Why would you want to pay me five basis points more than the market's 5.50? And you're trying to pay me 5.55." Then 5.55 became 5.60 the next day, then 5.65. Then you get this call like, "Hey, my guy really wants you to loan him cash every night." Because all of a sudden, nobody wanted to lend money to Bear Stearns and Lehman anymore. And so that kind of led to this crisis. And then the world just blew up. It was a huge housing crisis.
All of a sudden, everybody's starting to look underneath the hood and say, "Wow, these loans are really horrible. What are you doing? What's this girl doing, buying a $750,000 house making $50,000 a year?" Whatever they were doing. So, interesting times. It got a little hectic for where we were at. I think folks who had money, we had money funds, which is similar to what I was running, blow up where they can no longer pay, give a dollar to somebody and give that whole dollar back. They did what they called breaking the buck. So all of a sudden we had clients calling us saying, "Hey, you know that fund we're in with you, what is it exactly again? And what do you own? And do you own any Lehman brothers?"
So once the money fund industry started to crack and it was just the whole world felt like it was falling apart. You had huge job loss, you had huge unemployment. So yeah, it was some tough times, but we definitely navigated. I think anybody who came out on the other side of it unscathed, I think it's definitely something to talk about, when you talk about to clients and business world. Where I could go to somebody and say, "We were out of Lehman before there was ever an issue. We never owned asset-backed commercial paper, because we didn't feel comfortable looking at." So I think you can definitely use the background as something to be positive for the future in your job.
Currie:
So were there other local or state governments that were investing in the asset-backed mortgages?
Laura:
Yeah. I would say the biggest case study you can do is either go look at the reserve fund or the State of Florida ran a local government investment pool, which is very similar to what I was doing for Georgia at the time and owned this type of paper. I wouldn't even pick on them cause even some of the smartest guys on wall street were investing in this stuff. So it wasn't somebody at the state and local government level, this was happening across the country with the top folks and government folks. But the problem in Florida was they had a huge run on the fund and they owned a lot of stuff that was now in default or was having serious issues. And so they were not transparent with their clients early on and did not tell them that they owned that and they continue to pay a dollar out.
Well, if you have assets on your books that are less than a dollar and you keep paying a dollar out, what happens is you're left with the assets that aren't so great, right? So they continue to go down in value. Now what's left on your books are the worst assets because you can't sell them. You can't get a bid form, nobody wants to own them. And so all of a sudden they had to kind of gate the fund and say to folks, "You can't get your money out." Well, these municipalities, they might've either had to make a bond payment or make payroll. Now all of a sudden their assets were frozen in this fund that they couldn't get to. That's what kind of hit the headlines. The reserve fund was a public money fund, that would have had institutional investors in it. That broke the box State of Florida.
So all of a sudden this was all hitting the airwaves. That's when I think people at the Wall Street Journal and Bloomberg were calling us State of Georgia and saying, "Do you own any of this?" And, I think the advice I always tell people is, my boss always said, "You want to give somebody what you think is the worst outcome." Because if you come back, if you say, "I think you're going to lose 10%." And then you only lose two, people go, "Oh wow. I thought I was going to 10, I only lost two percent. That's great." I think the biggest thing that we did was we were very transparent and the minute that news broke, we put something out on our website. We sent a letter out to our clients and showed them the holding, showed them what we owned. So that got a lot of people off the ledge that might've panicked and said, "We should get our money out." Because now they saw what we owned, that wasn't anything that was in the headlines.
Currie:
What were the things that you were seeing in the market that kind of were red flags or gaps in logic that prevented you from having your money tied up in that?
Laura:
So, interesting. I went to a Bank of America conference at the time and they were doing this kind of introduction to asset-backed commercial paper. I always tell people, I definitely never think I'm the smartest person in the room, but I think you just have to have common sense about you. Right? I remember coming away from this conference and he called me the next day and he said, "What do you think?" I said, "Well, I got to be really honest." I was like, "I really couldn't unfollow and understand how the assets do this and then they get secured and then they send them off and who owns what? And who's this shell company that's over here?" I said, "If I can't understand it and I can't explain it to my boss or to my clients, I can't buy it. I can't do it." And so I was like, "No, thank you."
At the time we were getting compared to the Florida LGIP. They were owning at the time commercial paper and specifically this asset-backed CP and the SIVs and their yield was about 10 basis points more. I think just being, if you really don't understand something and I think, in hindsight, I think a lot of people sat in the room and because the people who they thought were really smart were... I don't think even the people who were creating this really understood it. I think anybody who just thought, "Well, everybody on Wall Street is buying this or all the money funds are buying this." And just kind of took the rating as it was like, "Well, it's AAA rated or it's A1+ rated and just stuck it in the phone and relied on writing. That was the biggest thing that came out of crisis was you couldn't rely on the rating agencies anymore, that they were just stamping, AAA or A1+ on anything and everything.
Currie:
Yes, but shouldn't the IPO of someone like S&P raise flags immediately? At least, I would think.
Laura:
Right. Well, I don't think they really... I'm not sure. And that's why I said, I don't really think anybody really understood some of the structures. I really don't. I think they just... It's triplet, it's these loans they're being packaged. Definitely sold off pieces that were more riskier, but those pieces didn't get the AAA rating. I don't think, I think the theory was you can never lose money buying a house. Right? Never. Well, so they never thought that the housing market would collapse like it did. So all these values that always were going to keep going up, dropped. A lot of the securities that were built around stable or increasing value, that didn't happen. So, it was almost like you never plan for... You only plan for the market to swing one way. You never thought it would go the other, would get swing the other way. There was never that plan of, "What's your worst case scenario?" And the worst case scenario is way worse than anybody ever planned for.
Sarah:
What advice do you give the students now based off of what the market it was and what you experienced and what the market is now?
Laura:
I think anybody that doesn't believe history won't repeat itself is going to look foolish. I think you have to study history to move forward. If something doesn't feel right, it's probably not right. And to dig a little deeper. That sounds so basic, but I don't think a lot of folks did that. Again, I go back to what I said earlier, that if you don't understand something, then if you keep studying and it just doesn't make sense and stay away from it. Because I think most people will learn that, if you outperform somebody by 10 basis points or 50 basis points, or one percent or two percent, sometimes the people who are making these really great returns are taking huge risks. So it's kind of like where you study with your sharp ratio, right? Where there's a reason why there's more risk.
There's more reward with a lot of risk and are you comfortable taking that and making sure... Are your clients comfortable taking that? Educating your clients on what they're doing and why are doing it. I don't think you ever... You can be too safe, but you can also be too risky. So I think playing it smart and not just buying something and closing the books on it, right? That's why these credit analysts get paid to continue to monitor the credits that they buy. So staying on top of and continuing to assess how your clients feel about... If you're a private wealth guy and you've got clients, continuing to see how they feel. How they felt a year ago might be very different to how they feel right now and continuing to have good conversation.
So it always goes back to, it is you have to have a rapport with your customers and any business that you're in. Continuing to get their thermometer of how they feel about the business of what you're doing for them. So it's a constant feedback, whether you're Chick-fil-A and you’re selling chicken sandwiches or you're selling somebody's assets, really focusing on if you're doing the right thing for your customer.
Sarah:
How does the global market affect what you're doing and why you're doing it?
Laura:
So, it's definitely overall impact, the US economy, right? So when the global economies are faltering, you're going to have more people coming into the US. We've always been kind of a safe investment, right? The dollar has always been a safe currency to be in. And so when you have real turmoil, you're going to see a lot of people come in to the US market. Obviously things with China right now are throwing things kind of crazy between the world economies, but we're more globally connected than we ever were. So you can't not focus on what's going on globally. Obviously in the equity space, a lot of companies that have a global presence are going to be impacted on what's happening globally.
For me, personally, from where I was managing money, it didn't play a huge role. I mean, but granted again, if you had foreign governments buying paper and the short-end of the market, they're going to drive yields lower or if they're selling paper they're going to drive yields higher. Foreign central banks have been a huge players in the treasury market. They aren't going to move the market around. So what they're doing does impact what their interest rates, where they're at. When you have a lot of foreign governments have negative interest rates, then it's a huge draw, right? To come into the US market where yields were still positive.
So you have to pay attention to it. You have to pay attention to the global economy. So many companies are not domestic US companies anymore, right? They have a huge... Think about the Coca-Cola's of the world, Apple, they're huge international players. That can have a huge impact on their earnings and obviously a huge impact on things here in the States.
Currie:
And do you use the same information, I guess, to assess or try to determine how the US government is to behave in the future? Because, you did say that you... That's kind of what you based your investment off of is how they're going to react.
Laura:
Right. So in the space that I plan, it's really kind of what the fed is doing or what they're going to do with interest rates. And how they view the economy. A lot of the movement in the front-end is based on where the fed is and what the fed is doing. So recently the fed in March, right? They dropped interest rates to basically zero. So nothing is going to trade in a very... As long as people think the fed is on hold for the next year, that they're never going to raise interest rates. You're not going to get a huge movement rates in the front end. Rates are going to stay down there at 10, 15, 20. Now on issuers in the front-end, that issue let's say Apples of the world that issue commercial paper, they're going to be based off of a little bit of what's happening in that treasury space, but it's also a credit play, right?
If all of a sudden their earnings fall off, it's going to get more expensive for them to issue paper in the front-end or even out the curve. Right? That comes into play. So you have to be a student of the fed. You have to understand where they're at. Right? It used to be a lot more fun. They didn't really verbalize what they're getting ready to do. My first kind of real experience with the fed in play was at 1994, I was at SunTrust bank and we were just getting ready to do this huge program where they were going to sell to your treasuries because they thought the fed was on hold for a really long time and by five year treasury.
So they extended out, well then shortly after they extended out, I don't remember what the timeframe was, but months, the fed came in. The Fed didn't come in and say, "We raised rates, 25 or 50 basis points." They used to do it through fed open-market operations where they were either buying or selling treasuries. Right? All of a sudden, my boss turns around. He's like... I'm like, "What?" And he's like, "The fed just raised rates." I was young and had no idea. I was like, "Well, what does that mean?" He's like, “It means we’re screwed." Because, we had just extended out. Right? So when rates rise, guess what happens to the value of your securities? They go down in price. So if you had extended out, now you had locked in a yield that maybe six months later, a year later was going to be much higher.
So you were kind of stuck owning these securities unless you decided to sell them, take loss and then reinvest at a higher yield and make up that loss over the timeframe. But the fed now basically it's like, it's coming home, it's like Romper Room. Where they just go, "Okay, kids. Today, we're going to raise rates probably in a month. You'd be ready." They do not want to shock the markets anymore. So, if you don't read the Wall Street Journal or watch the news you're in trouble.
Currie:
So correct me if I'm wrong, I believe it was starting in the 1980s. The American economy really started being driven by consumer debt. True? False?
Laura:
I would probably say you would probably be true. I mean, as old as I am, I was just watching a Ferris Bueller back then I was taking 15, 16. But-
Currie:
So my question is really, you starting in about, '02, people and banks for incentivized to sell homes. Right? Was it more about getting people in homes or was it more about driving the economy?
Laura:
I think they felt like increasing home ownership was good for the economy in general. When you buy a home, think about it, you don't just move into a home and then it's a bunch of empty walls. Right?
Currie:
Right.
Laura:
So you, you buy a home and then that starts that initial... If you look, there's the demographic chart that somebody puts together, right? It shows kind of where you start to spend and as you get older, your kids go off to college. Right? You're on that decline. So now you're trying to get a smaller home. You're selling stuff. You're not buying any cars. So, kind of out of college for you all, it was like, you buy a car, that's your first major purchase. You're spending big money in the economy. Then new next one is you're buying a home and then you've got to put things in that home.
It's good for the economy overall. Because now you're buying durable goods, you're buying refrigerator, washing machines, dryers, you're buying couches and furniture and bedroom suites. You're putting pictures up on the wall. It definitely leads to more spending, more home ownership. I mean, if you're not going to be in a space for very long. You might put a few things up in the apartment to make it look like you live there, but you're not going to make big purchases. You're not buying a refrigerator that comes with the apartment. So definitely it's an echo. It drives the economy, for sure.
Currie:
So with consumer debt, I feel like some people could make the argument that it's less about getting people in homes for the good of them being at homes, but moreso about say what happened in 2008 or 2002 to 2008 and taking the mortgages, you package them together, you create bonds, same thing with credit card debt. If you have these people who are pulling the levers of the economy, politicians or the fed, isn't in their best interest to promote irresponsible spending in that way?
Laura:
The fed wants you to borrow, right? That's rates are at zero. They want you to borrow. They're bringing rates down so that you will take on debt and that you will go buy things to the economy. Think about it. That's why they gave these folks 600 extra dollars so that they would continue to spend, which is going to help grocery stores and businesses. Sadly, a lot, like my former coworker, his son is making more during unemployment than he was making before he left. Right? And so some people aren't going to spend that money. That happens a lot of times when the fed does divvy out some... The federal government divvies out money, but some people don't spend it. So it's really not doing what it was designed to do. Now people are just saving it. So what's the point of saving it when you can't even earn five, 10 basis points at a bank, right?
Over the course of a year, we were laughing like, run the numbers on earning five basis points on 100,000,000 for a year. It's not a lot. It's like five dollars. So, you're not really incentivized to save, but you also are fearful of what the future is going to look like. And so as you watch the news and press comes on and says, "The politicians may vote not to extend that benefit of the additional $600. Guess what you're going to start doing? You're going to quit spending, right? You're going to put that money back in the savings account because all of a sudden, the bank's not going to forbear your loan anymore. You're going to start paying on your loan again, people are going to start to get foreclosed on.
So yeah, they want you to take on consumer debt. Unfortunately, unlike other countries, Canada, for example, if you get foreclosed on at home in Canada, it is so hard for you ever to get a home loan ever again. Here in the US people who got foreclosed on '08, '09, few years later, banks were willing to lend them money again. They had already proven that they couldn't pay a loan and now someone's extending them credit again. So yes, we are... Consumer debt, that's good for the economy.
Currie:
We were talking about this earlier, Sarah and I, and we did touch on it just a little bit, a few minutes ago. But I read an article that was talking about how the US economy will be passed by the Chinese economy by year 2030. So how does the US economy stay competitive with someone like China and of course India, they're bidding for second as well. How do we stay competitive in that landscape?
Laura:
I would honestly say, I think this goes back to one of the articles I read and I know you're talking about just from articles I've read. I think one way is we truly do need to look at our education system and not the college level, but from first grade to 12th grade and putting well-educated students out in this world. That's everybody in this country and it's kind of not leaving any kids behind making sure everybody is well educated and putting more money into the education system. I also think we have got to have policies that maybe are more globally beneficial to the US. I mean, I think for a while... now the world is so global, if we try to turn inward and become just a US-based economy in that global, that could hurt us. Or somebody on the flip side say it might be better. It might take jobs that were taken overseas and bring them back into America. But from everything you probably studied in your economics class, anything that somebody can do more efficiently and effectively, they're going to outsource that, right? We do that in companies today, and that's what they started to do. They pushed jobs to where the wage was lower, which is good for them overall revenue-wise.
So, I think what's going to happen in this world is that you're going to have standards of living that start to meet where people who are living a substandard living, if jobs go over there, their wages are going to start to rise where their standard of living is going to come up. For some people in the US it might come down, where you start to have almost a global kind of standard of living. Who knows if we'll ever see that in our lifetime, what it's going to look like. Right? But definitely, I think that's why you get these opinions on the presidency of who's going to come in. Who's going to be more good for business, right? Their policies globally or nationally, what their tax policies are, what their policies are in regards to social policies for the country.
Currie:
Something that we've always found it interesting and we've talked about a few times which is better, which is better for the American people to have the jobs here. So we're the ones getting paid to do them, or to have the jobs in other countries, where the labor is cheaper. Therefore, the product for us is cheaper and we have more money to spend on other things. Is it a balancing act? How do you view this?
Laura:
It's interesting because I've chatted about that with folks before. I had a buddy who grew up in a really small town and all of a sudden Walmart came on the scene and his mom owned the local store. And now all of a sudden, someone said, "Why would I pay for that from your mom for five dollars versus if I go to Walmart and get it for two?" So it's almost like these people want the best of both worlds. They want to have cheaper goods produced, but then we get mad when we look at how maybe that it's taking jobs away from America. And we also don't like that the folks who are doing those jobs in other countries aren't treated well or they're not paid properly, that the wage for them is not really a true standard of living wage.
Sometimes I think some of the jobs that immigrants to this country do or that we've outsourced, sometimes I feel like some folks don't want to do those jobs and that's why they've gotten outsourced. This goes back to the education. If we're more of a service economy now, which we are than a goods-producing economy, then we really do got to retool these factories and these factory workers and give them the means to do something that can provide income for themselves and their families. That they've grown up doing a certain job and now all of a sudden, we decide that we're not going to make cars in the US, we're going to send that overseas.
Currie:
Right.
Laura:
That's where... Even now I think trade schools, getting a true trade that you can do here might be what some young kids should do. That college might not be for them, but having a trade that they can do and being a welder or a plumber and not looking as if those jobs are not good because you didn't go to college for them. So yeah, I don't know. I think it'd be great to have more American-made goods. I think a lot of times they are of higher quality, but we also ask people, would they rather own a BMW or a Honda? Though, Ford Bronco is going to kill it. Did you see the new Ford Bronco coming out?
Currie:
Yeah.
Laura:
Yeah. That's a shout out to my guy at the gym that is a Ford dealer, owns a Ford dealership here in town. So we still make some great products, but I also think we've led people to believe that products made overseas or from foreign companies are better. And so retraining. But it's okay. I own a GMC, I love my GMC Acadia, but would I probably back in the day probably bought a BMW SUV? Probably yeah. Because someone had said, "Oh, they drive really great." You gave up the sports car to get an SUV. It's still going to drive like a sports car. So retraining folks too. Yeah. And making a quality product that people want to buy.
Currie:
Right. That's an interesting perspective and I don't disagree, but how do you retrain them and what do you retrain them for? If we're moving more towards a service economy, we are already doing that. But as we continue to do that, some people just aren't coders and some people will never be able to learn Java and Python and things like that or be a psychiatrist or an MD or... So how do we train people? What do we train them for?
Laura:
That's where I think this whole, as you said, that I think where some people... One of the things that's been hurt in COVID is the service economy, right? Hotel workers, restaurant workers, they're a huge part of our US economy. We are a very service-based economy and you can see why they are fighting for higher wages. People all want to say, "Yes, they should get a wage increase." But with that then means a company is going to have to charge you more to sit down for dinner. It's going to have to charge you more to stay in a hotel. So you almost have to retrain people that... Because that's why, anytime you have unemployment at a very low rate, which we did prior to COVID, that's where you always get that fear of wage pressure increases. Right? And what happens with wage pressure is then you have inflation.
We haven't seen that over the course of the last 10, 15 years, right? Those inflation pressures haven't been there, but that's because a lot of it is more of a global economy. If something, if labor gets too expensive, we'll just outsource it. We'll send it over to another country, right? Or we'll find a robot to do the job that you and I used to do. Now, we can do things online. We can do things far more efficiently with systems. I don't need three people on the back office doing any accounting work. I can have one and it can be fed to systems that talk to each other versus printing out a report and somebody typing it in. And so we have to find ways to... That's why a lot of small businesses get started, right? Is that folks can't find a job or they think there's a better way to do it. And so we do, we need to push for innovation with students.
Currie:
So you, obviously are an investing guru and have handled billions-
Laura:
That's left for Warren Buffett. I don't get put in that same.
Sarah:
That's not what we were told, Laura
Currie:
Yeah. No kidding. Have you looked at your LinkedIn? So you've handled billions of dollars. We were talking about this earlier and we've done a lot of reading about algorithms and artificial intelligence. With the rise in AI and algorithm-based decision making, how does someone who's passionate about investments, stay relevant and stay hireable because as we progress through the next few years, I think, and I could be wrong, but a lot of decision making is going to be based on algorithms.
Laura:
That's like a side of the investment world that I don't think it's going to impact the space that I play in, right? I definitely think in the equity world, I think that's going to happen. I think you're going to have, you already have it right now. Right? A lot of computers making investment decisions, which obviously can crash the system. Because the minute the market opens, right? Computers all at once can do what it might take someone minutes or hours to handle trades. So it's created a lot more volatility for the market. How do you stay relevant? I still think if you... Especially like in the equity space, the fundamental research is never going to be dead and gone and figuring out how to... I tell people all the time, just be a team player and a hard worker. Right? That is never going to go away.
Do not do just what's asked of you, but do what you... When you see the need of going right in and jumping in, being innovative, coming up with ideas, right? That not just kind of showing up for work and do the same thing every day. Doing with passion, thinking outside the box, bringing ideas to management and networking and mentoring. I think sometimes... I tell people all the time, the job that you want is not going to be... You don't see it on LinkedIn and apply for it, the job you want and job you really want is going to be through meeting somebody at the gym and finding out they worked for the company that you want to work for and establishing rapport with them and letting them get to know you. Because half the people I know that have gotten really great jobs it's because they knew somebody that worked there.
I mean, my job, my new job is because of the rapport I had with people before I ever landed there. And it was, "Hey, you should talk to her. She's played in this space for 24 years. She has these connections." That's how you're going to get the jobs that you want. So I think, making connections and staying, not getting stale, right? Is continuing. I love that you are constantly talking about books you're reading. Even if it's just reading the newspaper every night. What's happening in the world? Being relevant and being able to carry on a conversation. Not just going home from work and doing your job and talking about the Tiger King on Netflix, how he... Showing somebody that you love the space that you play in, right? That your heart is in the business. And not to a part where people are like, "God, does he have a social life? All he does is talk business, but being very well-rounded inside and outside of the office."
Currie:
Being well-rounded, that's really great advice for these new grads and current college students. I think we get so sucked into and wrapped up and our major and being really great at that and that's very important, but I definitely think you hit the nail on the head. You study all the people who are the most successful in their areas and they don't have the highest IQs on earth. If you look at the person that does have the highest IQ on earth, are they successful? So yeah, I think that's a really great point and I'm glad you brought that up because we talk about that all the time. She's a huge proponent of being well-rounded and just continuing to push yourself, continuing to learn, just got her PhD in kinesiology.
Laura:
Yeah. And I think, this generation is very great about work-life balance, right? If your boss knows how to turn it off at 4:00 and you're still working at seven or eight o'clock thinking you're impressing him, you're really not. Right? I will give you a great example. Owners of my company figured out that when they were doing these weekly calls, it's stressful to work from home, when you have two kids at home. Even if you're not married, you don't have kids, there's a dog barking in the middle of a Zoom call, you're not leaving your house to go to work. Everything feels very... I said, the only reason why we can feel as different, it's because it's Saturday and it starts with an S. Right?
Nothing really feels very different. So they decided that on Wednesday, starting at noon, we would have, what's called wind-down Wednesdays, where they were like, if you... You have to take care of your clients and if you're settling trades, you have to do that. But if you can afford to walk away and take a break away from the job at 12 o'clock, then do so like, go for hike, if you live in Denver. Go sit at a brew pub and have a beer, if that's your thing. Right? That's what I would say. If your boss has offered that up, you're not going to look great if you're sending him some email at 4.45 in the afternoon. He's going to be like, "Dude, I gave you the afternoon off. What are you doing?"So finding interests outside of work.
I don't think it's always the hardest person. You don't have to be the hardest working person all the time to get ahead. There's being able to get in a environment when you're out with clients and being able to talk about the things that you enjoy outside the office. Right? That's again where well-rounded would come into play.
Currie:
I feel like it's so hard to do that. I read an article or an essay by I believe it was Paul Graham, who's the founder of Y Combinator and one of the founders. And he says that being a startup CEO is a lot like being an Olympic athlete and it takes lots of discipline, but you also have to focus on your body. You focus on your sleep and your nutrition and your exercise. He says, "Do those things and then work, because you can go all in and be laser-focused on your work and get 20 hours worth of work done in eight hours, if you're taking care of your body. How would somebody who is not a startup CEO and not in the tech industry, say somebody who's just graduating from Auburn, how do they balance? How do they balance those things? How do they take care of their mind, take care of their body first so that they can be well-rounded?
Laura:
I mean, that's really interesting that you brought that. Now I'm like, "Oh, I got go read that article." That's great. But I feel like personally for myself, I always... Even when I worked at the bank, my hours were 8:30 to 5:00 and at five o'clock, I shut it down and I went home. Right? I went straight to the gym and I'd work out for an hour and then I'd come home and I'd eat. Definitely it felt a little Groundhog Day. You're doing the same thing. Right? You get to bed, you get up. But you definitely... I do think that the people who don't learn how to do that, I think that's the folks that later, as they advance in their career, they don't know how to handle the stress. They don't know how to let it go. They don't know how to say, "It's okay that we didn't win that business that we went after. I'm just going to go for a run and shake it off." Right?
I do. I mean, at the end of the day, stress is huge on the body. So learning how to take care of it through, I mean, people I get up and I work out at 5:30 in the morning, so my alarm goes off about four 50. And people were like, "God. If you alarm goes off that early, what time do you go to bed?" I said, "Oh, I'm in bed by 9:30 or 10." I was like, "I need my seven, eight hours." I was like, "Because when I get five or six, horrible." Yeah. And learning how to be... One of the best things you can ever do is truly learning how to manage your time. Right? Not being wasteful.
I would say this as a 52 year old now, you can't ever get back time. Right? So there are things that I wish I would have done and my advice to young people is it's going feel like... They're going to go, "I'm 25. 52." Believe you, me. You're going to wake up one day. It's the Kenny Chesney song. You're going to wake up one day and you're going to be 50. Right? You just felt like you went to sleep at 25 and you wake up when you're 50. But learning how to do all the things that you want to do, but also showing yourself some grace for some downtime, right? Giving yourself rest, turning off. People shouldn't be working seven days a week. There should be some rest time in there and getting away and truly shutting the laptop down and walking away from it.
I would say to young people who have to be connected 24/7, the best trip I took in the last year was when I truly left my work iPhone at home. I didn't take it with me. I sat on my out of office, I'm not available, I'm going to be where I can't be reached. Which was a lie. I was in Arizona, but for all they thought I was on a remote Island in Bora Bora. Right? But learning how to disconnect, because I really do think you need time to walk away and recharge. If you're not doing that then... And the greatest time when you're resting is probably when people would tell you some of their greatest ideas come.
The old Fed chairman Greenspan, he used to say his greatest ideas would come when he was relaxing in the bathtub, which is not a great visual. However, I mean, that's just rest time, when you're allowing your mind to rest. Yeah. So, I would agree.
Currie:
So what's next for you? What's your next phase? What are you chasing now?
Laura:
So I took myself out of my comfort zone. I left the same job I was at for 24 years. And I moved from a role of managing money to now moving into sales. Most people are like, "Don't you do it the other way around? You go from being on the road and selling to being in a job where you're sitting in the office for 40 hours a week and you go to the government job." But we were just talking about this. I was talking with another woman who, LSU grad, constantly, I think it's fun to take yourself out of a comfort zone and to get yourself uncomfortable. Because, I had another conversation with a woman who said, she got to 50 and she said she could either change or she could just kind of coast the finish line of the job that she was in. And she decided to coast. And I just thought, "Well, that's not my personality. I've never just coasted."
I might've mentioned I was a marathon runner and I don't just go... There's people who run 40 of them a year, just to say that they did it. I'm like, "If we're going, we're going all in. We're going to train. We're going to train hard for 18 weeks and we're going for time." Right? I was a goal setter like, "This is my goal for this race and you either hit it, great. Or maybe set a new goal hit if you didn't hit. How did I, why did I not reach the goal? What happened? Where did I go wrong in the day of the race?" Right? Or, "Where did I go in my training leading up to the race?"
So that's just in my personality but I also would say, it's okay if you get to be 52 and you want to coast and you say, "I worked really hard and now I'm ready to just kind of finish up the career and take it easy. But I have... Luckily for me too, I have kids that are 10 and 13 and I still got to pay for college. So I don't really have time to coast.
Sarah:
So Laura, last question. What final thoughts or advice do you have for our students?
Laura:
My advice would be to always learn and I think, one thing I've always said too, is that... There was a guy, I follow him on LinkedIn. It's the guy that owns the Minor League baseball team for Savannah called the Savannah Bananas. He's great. You got to go follow him. He's awesome. But I think you can learn. If you're wise, you can learn something from everybody, right? From everyone. I think he recognized that and that this woman who was doing a job that might... She worked at the concession stand at the baseball stadium or something, I can't remember. I have to go back and remember, because I was reading it late the other night. But realizing that everybody has some type of advice to offer you and maybe it's a guy who's grinding in and out at work and he goes and the lady who he thinks that doesn't have a job as great as him, who's making coffee, but she's singing every day. Right? That learning. How does she find joy in a job when she's living in maybe in their mind a substandard way of living.
So, recognizing that there's something to be learned from people who've walked in your steps before you, but also taking the time. I'm a huge proponent of getting to know people. I'm talking about, if you walk into Starbucks every day, get to know that person. Know their name is Jim. Jim makes coffee, Jim, what's your story? Because I think that also when someone feels like they're being cared for, maybe that's what somebody needs for someone to come along and mentor them and say, "Jim, what are you..." Because Jim might say, "Hey, I never really ever want to work at Starbucks, but I'm trying to make ends meet, I lost my job." And then making that connection.
So, meet people, everyone's got a story. Be kind, love more, constantly learn, just use social media for more positive. There needs to be more positivity in the world, less negativity. You're not going to change somebody's mind over a Facebook post or a Twitter tweet.
Last thing I will tell you, I'm reading a book and I should show it to you. Well, I was looking at it earlier today. It's a guy who graduated. I think he's big, right here. It's Know What You're for. I think it's A Growth Strategy for Work, an Even Better Strategy for Life. I got to tell you, there are so many nuggets in this book. Great book I will. This is a guy that used to work at Chick-fil-A and now he's a pastor at a church. So you talk about two different... He was in charge of marketing for Chick-fil-A but some great stuff that I would recommend for young people.
Know what you're for and a lot of times what you think as a company, what you're known for and what you're actually known for, if there's a big gap between that, that's why you're not successful. And also, he talks about knowing what you're for... If you want to be known for being genuine and this and that and you work for a company that, that's not their mission, then guess what? You're probably at the end of the day, not going to be happy working for that company. Right? So finding companies that match your values, that if you want to be a valued employee, then you don't want to work for some cut-through organization where they don't care about family. So anyway, great plug.
One of the great lines from the book was thriving businesses will practice less monologue and more dialogue. I think that is not just applicable to business. Right? I mean, to a business, I think it's applicable to your own wellbeing, right? Think about it, if you're at a party and someone's only talking about themselves and never asking you about you, right? It becomes very difficult to have a relationship. So really learning how to have dialogue with people versus monologues. If you're definitely on the sell side, getting to know your customers. I think a lot of times people are going to do business with people who they like at the end of the day. Right? And if they feel like you like them and you like them, because you're not just trying to do business with them, that you'll be successful. So again, back to making relationships with people.
Currie:
I love it.
Sarah:
That's great.
Laura:
Yeah.
Currie:
Thank you so much.
Narrator:
Harbert. Inspiring business.