$15B in Capital: Raising Capital From Institutional Investors

Hey welcome to another episode of Making Billions, I’m your host Ryan Miller and today I have my dear friend John Jennings.

John is the President and Chief Strategist of a $15B family office group known as the Saint Louis Family Trust.  He manages the assets and allocations of 60 UHNW families.  He is an adjunct professor at Washington University, Forbes contributor and the author of the Amazon #1 Best Seller ”The Uncertainty Solution”.

What this means is that John understands Institutional Capital and Family Offices and he’s agreed to come on the show to give you his advice on raising capital and asset allocation in this sector to help you in your pursuit of Making Billions.

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[THE GUEST]:  John is the President and Chief Strategist of a $15B family office group known as the Saint Louis Family Trust.  He manages the assets and allocations of 60 UHNW families.  He is an adjunct professor at Washington University, Forbes contributor and the author of the Amazon #1 Best Seller ”The Uncertainty Solution”.

[THE HOST]: Ryan is a Venture Capital & Angel investor in technology and energy. He achieved market-beating placement growth in his first 5 years in the industry.

Transcript

Ryan Miller 
My name is Ryan Miller and for the past 15 years have helped hundreds of people to raise millions of dollars for their funds, and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, in the show will give you the answers so that you too can enjoy your pursuit of making billions. Let's get into it.

Can we just admit that pitching institutional investors is literally one of the most challenging things when raising money. So in this week's episode, I have my dear friend John Jennings talk about what he likes to see when getting pitched at his $15 billion investment firm. I can promise you, it's not what you think. Stay tuned for all of this and more coming right now. Here we go.

Hey, welcome to another episode of making billions. I'm your host, Ryan Miller. And today I have my dear friend, John Jennings John is the president and chief strategist of a $15 billion family office group known as the St. Louis Family Trust. He manages assets and allocations of 60, high net worth families, and he's an adjunct professor at Washington University, a Forbes contributor and the author of the Amazon number one best seller, The Uncertainty Solution. So what this means is that John understands institutional capital and family offices, and he's agreed to come on the show to give you his advice on raising capital and asset allocation in the sector. So John, welcome to the show, man.

John Jennings 
Great, thank you. I'm super excited to be on. I mean, I've been it's like people calling the radio shows, like longtime listener, first time caller. So longtime listener first time on the show. I also understand and it makes me feel good is that your listeners are not only just, you know, way above average, and intelligence is success, but they're all extremely attractive. So glad to put myself in that pool?

Ryan Miller  
Yeah, well we are certainly honored to have you and you know, it, the show is done very well. And you're very generous. And it's all because of amazing guests like you. So you know, really quick, just in like, 3060 seconds. Tell us a little bit about what you do. How did you get there and just just warm us up a little bit.

John Jennings 
Yeah. So I started as a state planning and tax lawyer, and I also did a little bit of traffic law still do. Work at Arthur Andersen doing investments and high-end tax planning strategy, tax shelters, it was a bunch of fun. And then you may remember that Enron thing, right? So Anderson, and it's really affected my worldview is, you know, we had 90,000 employees worldwide, and in the span of nine months, went out of business. And we formed our current company, St. Louis Trust and Family Office out of the ashes of Arthur Andersen. And you know, at the time was like, Oh, this is horrible. But it's selfishly turned out pretty good. And our secret sauce is, is we have 60 client families all across the US, actually, most of them aren't in St. Louis, a lot of them never been to St. Louis. But we're 64 employees. So we're, you know, have this one to one employee to client ratio. And so allows us to be incredibly customized, because, you know, our clients are mainly in the 100 million and up space. So they have a lot of complexity, a lot of service have a lot of lot of opportunities, but a lot of, you know, challenges as well. So, yeah, that's what we do. And I'm President, I've been there. Like I said, since day one, it's been fun.

Ryan Miller
Awesome, Well, thank you for that. So we've go we go from practicing some law and and all these things and finding your way rising like a phoenix out of the ashes of our ultra high net worth people. And that really helped to drill down now and 15 billion, and that's an aggregate of all the stuff of the families that you support. I would say you're right at that institutional level. I mean, that's just my opinion. But you know, your perspective on this, this is not a fan, small family office, folks, this is a large institutional investor, and asset allocator, and manager. Now, with all of that experience, we'll get into that big sexy stuff and the billions of dollars, but before we do, we got people in 100 countries listening around the world, as young as high school, apparently, there's, there's a high school in Texas that literally learns finance from the show. So yeah, we gotta love the kids out there, and all the way to other family offices and people like yourself and everything in between. So that being said, there are people listening. So let's, let's address the beginners before we get on to the more advanced stuff. So that being said, John, I'm just curious for the beginners out there, how do they win in the early days in asset allocation in really just getting started in high finance so that they can get to that level? What would you say?

John Jennings 
Yeah so, you know, I had this big watershed event that many of us had, if they were, you know, out working doing this in the financial crisis, and I'll tell you, up until the financial crisis, I thought to be, you know, a good financial adviser or investment expert, like I didn't know everything, like I just drink from the firehose of information. You know, I read, obviously, the Wall Street Journal, and every day in Barron's and Investor's Business Daily, and Financial Times I subscribed to all these services, and you know, read what all of our investment managers did. And I was like this walking, talking encyclopedia, no at all of what was going on the financial world. But, you know, something funny happened is I didn't see the financial crisis coming. And then once we were in it, I couldn't see a way out. Right. And I tell the story in my book, but I have this coworker, she's super bright, you know, CPA, went to Tulane. You know, she's fantastic. One of the cofounders my firm, but I went to this client meeting with her, and she was so calm, it's like March of oh nine, right. And she was like, so calm. And I knew so much more than her about the market. But like, she gave such better advice. And I was like, okay, something has to change. So really, what I did is after the financial crisis, as I turned off a lot of the news, a lot of the noise, trying to stay up with everything, and I shifted to seeking wisdom by reading more and more books, you know, and I read a ton of investment books, but also other areas, you know, physics and statistics and psychology, works of fiction, and a lot of biographies. And it's interesting, Charlie Munger, you know, recently passed, but you know, one of the wisest men around, you know, said you'll, you'll learn more by reading books than reading research reports, and 10 ks and, and everything. And he said, you learn more by reading 100 biographies than 100 investment books. And I really think it really differentiates people to go read, you know, read books, because you'll, you'll have somebody that you know, spent, I don't know, decades of experience, and then the right and tell you basically what they learned. And you can read it all in like four or five, six hours. It's, it's amazing. And so yeah, that's my biggest My biggest piece of advice of people of all ages, you got to be a reader and read books, when people are like, Oh, I read, you know, you know, I'm always reading but I'm reading, you know, like news reports and white papers. I'm like, yeah, not not the same, not the same.

Ryan Miller
And, that's, that's, I would say, listening to you on that. That's a difference between absorbing knowledge and absorbing wisdom that you first alluded to, is to say, you know, do you know the most well, did this person know the most in your opinion, probably not. But they had some some way about them that communicated information in a wise way.

John Jennings 
Like, I read 66 books. Last year, I read 69, the year before 2019, I read 101 book says My goal was a was 100. And, and one thing about having a, you know, a goal of reading a lot of books, and you know, I think at least a book a month, you can do two or three for a month, without a whole lot of trouble is it keeps you from doing other things that are going to distract you, and probably waste your time. Like, if you're spending any time on tick tock or x or Facebook, or any social media, or if you're just like flipping around, like you should be you should be acquiring wisdom from a book I love or, you know, enjoying a great work of fiction.

Ryan Miller
Yeah, that's right. And so what does that do as far as so here we are, we're cranking through those books. These are the beginners, your early days, just absorbing that information. Now, that reminds me when I was young, and I've told you this story, so we'll, we'll tell it to the world. But when I was a young analyst starting out, just like you suggested to people starting out, I just finished grad school. And I would take the train one hour each way. And I was just an analyst, like just entry level, nothing fancy, just a number in a in a company of 15,000 employees, I would picture the day that I was an interview to be an executive. And I said that day is gonna come, right, I'm young, I'm in my late 20s, and just finished grad school. And I would study old textbooks, and I was studying information. And I would just continue to say, I'm going to be the best at what I do not the best in the world, there's no ego, it's just I really want to add value. And in order for me to do that, I had to become someone who could provide value. And so I stayed on top of that, I read everything I could get my hands on from leadership to portfolio management, to finance, accounting, derivatives, central banking, literally everything I could find statistics, as you mentioned, and after a few years of that two hours a day, five days a week for about five years. My next job was a CFO. And I literally made this like from the bottom of the metaphorical totem pole to the top five years, in five years. And that was all from that. And when that moment came that I envisioned five years before that, it was a shoe-in. And in that moment, you want to feel prepared. And that's a mind game that provides And so based on that mind game, John, I'm curious of like, how does that how does that help you? Like, does that help you with flow? Like, what is what does that do when you read that much? In the early days?

John Jennings 
Yeah, so read, that was not right. So yeah, I'd say early in earlier days, I would I would focus a little bit more on, you know, my profession, right. And, you know, whether that was law or tax, and actually, you know, read these these, like, Tomes, these treatises on, you know, like estate planning and tax law and things. But, but, but, you know, what it does is it gives you perspective, and it like, gives you more reps, right? So, you have your own career and your own experiences and says limited set of data points, but when you read a lot of other things, there's all these things that you can bring you I mean, Charlie Munger talks about him as being these mental models, right? So you need he says, you know, you need to create these mental models, that was a really ways of thinking and things that are true that you can fall back on and like an example of a mental model, and that would be you know, wisdom would be you know, Warren Buffett's you know, be greedy when the markets are fearful and fearful when the markets are greedy. I mean, it's, you know, it's right because it's simple, but it's not easy. Right? And, and, you know, you start picking it up all sorts of things like that by reading, you know, books and read books by you know, the great investors and, and, again, biographies, and also, you know, I don't I mean, I think there's some people just To read nonfiction, like seriously read some fiction to does these creative things in your brain, I had an epiphany, he's about the world after reading a, you know, a section of a, of a work of fiction. But yeah, I think it trains you in a way. That's different than if you're, you know, passively consuming TV, or you're reading, you know, things in the Wall Street Journal on, you know, different articles. I think it's a nice discipline that gives you a great, great perspective.

Ryan Miller  
I love that. And, you know, in my early days, and you can you keep me honest here, John, in my early days, I would pursue money. And I thought that was a noble pursuit, and it is, to a point, what have you found? Have you found that to be I mean, not only yourself, but also all of these ultra high net worth families that you speak with all of these people who've had some very exceptional success in the finance area? What have you found to be true that you can advise beginners as far as the pursuit of money?

John Jennings 
Yeah, so in my career, so I'm 53. So I'm not like super old, but nor, nor am I, like, you know, starting my career, I'm kind of like on the, you know, the planning for the

Now youre ramping up, man, you're ramping up?

Yeah Exaclty. But, you know, what I've noticed, both with families that I work with, just throughout my career at different places, is that the people that focus on money are sort of less happy, and often end up being less successful, because we pursue the money aspect, that's not always the best thing for you, right. And it's interesting, um, my next book that I'm writing is about money and happiness. So it's related to my observations of spending 25 plus years in this industry with working alongside and giving, like the inside view of these these really wealthy families, but it's backed by a lot of research. And there's a number of paradoxes about seeking wealth. And the first is, is that more money is correlated with more happiness and more life satisfaction. And that makes sense. I mean, it's not it's not a super strong correlation. And it starts, you know, having diminishing marginal returns as you get more and more money. I mean, that makes total sense, right. But you know, people that have, you know, people that make $500,000 tend to be a little more happier, and have a little bit more life satisfaction that somebody makes $200,000. It's just, that's how it is, but, but what's interesting is studies have looked at, but if your goal is financial success, you end up being less happy. It related to that, again, you know, being successful in your career is great. Like, it's, it's really fantastic, successful in your career, and it gives you, you know, once you have success, it gives you self esteem gives you life satisfaction, correlates of happiness, but those that focus on career success, and like that's a big driving force, and, you know, think of people you know, are really ambitious, they're less happy and end up being less successful. And, you know, Adam Grant, and I know, Ryan, you and I've talked about Adam Grant, really like his work and big fan, one of his one of his early books was called give and take, and it's about givers and takers. And it's fascinating, what he found, is givers. So people that are wanting to put value out in the world without expectation of return. And to help other people they're less focused on themselves, where's takers are more ambitious, they're more calculating, they're more concerned with money and status and prestige. And they're more of a taker, what he found is, is that givers both were the most successful and the least successful, right? So some givers can get taken advantage of right. And then you have the takers kind of in the middle. But across the board, the most successful people were the people that were givers. And I'll tell you, my career really took a shift back around 2010. When I decided, I remember I was I was running and I decided, you know, I'm going to stop worrying about my career, how much I make getting promoted anything else. And I'm just going to focus on other people. Now, no one can do that. 100%, but I'm really gonna focus on the people, my firm, the younger people, bringing them along, training them, helping them and up my game, even with my clients, I'm gonna focus on everybody else. And I was doing really well up until then, but but at that point, like my career took off. And I think that's one of the hard things as I've managed people over time is getting people to understand that you will have greater career success if you focus on other people, but other people put the company put your clients first, don't worry about yourself, all those other good things will come. But as a result, not as a goal. So, you know, don't financial success should not be your number one goal, Career Success should not be your number one goal, do what you love, what you love to do, and what you're good at, and all the rest will pretty much take care of itself.

Ryan Miller
I love that. So having money does show a correlation to happiness, but having a goal to have money as a correlation to unhappiness. Is that right?

John Jennings 
Absolutely.

Ryan Miller 
I love that!

John Jennings 
And then people may say, Well, what about that study that shows once you have 75 grand that if you adjust for inflation is about 90 grand? What? What what what if you have, you know, over 90 grand, it doesn't add to your happiness. So two things about that. So number one, that study lobby won't realize it but the co authors of that study, one was Angus Deaton, most people don't know but the other is Daniel Kahneman. Daniel Kahneman did that 75 grand study is so famous you know all they're Thinking Fast and Slow Nobel Prize winner in economics and no two but he you know what they found in that paper, if you read it, first of all is that life satisfaction continues to increase while Happiness kind of tops, tops out. So. So you know, it's pretty interesting because it's not like you can just get happier, happier forever, right? So that's number one. But then number two, there was a, there was a second paper by a different researcher using the same set of data, it comes from the General Social Survey. And he found that happiness and life satisfaction both continue to increase. Again, they increase less and less, there's diminishing return, but it continue to increase. And in something that almost never happens in science or social science, Daniel Kahneman and Matthew Killingsworth, the other authors of the paper got together and did a joint paper reconciling the two. And what they found this came out about a year ago, and he's got, of course, everybody loves the 75 Grand paper, but the paper that corrects it, like has gotten no press right. But what they found was that economists original paper, there was this, there's a 20% of people about, they're just basically unhappy people. And basically, what happens is, is they get happier or less unhappy up until about 75. Grand, and then they top out, but for the other 80%, they continue to get happier, right? So so for most people, the happiness continues. And there's, you know, there's a study out of Harvard from 2018, that looked at the wealth of people, and they found that, yeah, people that have over 10 million are happier and have more or less fat satisfaction people listen to it. There's a study in 1985 of the Forbes 400. Not all of them replied, but they found people that were on the Forbes 400 were a little bit, not a lot, but a little more happier than people that were not worthless, for sure another and it sort of makes sense. Because like, when you have more wealth, you have the ability, first of all, to avoid things that are bad, like, you know, not having money, and, you know, in ramen noodles,

knows all that thing. But then there's other things like the things that you can do that do help your happiness, like buying experiences, doing things with other people, giving to other people buying time, so like, I don't, like mow my lawn or do my leaves anymore. I love that, you know, you know, there's all these other things you can do to buy time and all that comes with more and more money. So this idea that money doesn't buy happiness, no. But if you use it correctly, and you have your head in the right space, in terms of you know, what you're following in life, the money actually can create more happiness. But the paradox is for all the listeners is, but you can't have the money as your goal. It needs to be the result of doing something that you love, and you're good at,

Ryan Miller
yes. And be a giver, as well. So I giver I love that. And I say a serious thing in a kind of a silly way. But I often tell people, and I've told you this, John, when we've talked before, but being generous made me rich. That is literally the thing that changed it all when I was a young man just starting out. Probably pursuing money exactly what we said don't do, but I did in my 20s, too. Yeah. Right. Because you're just like, hey, I graduated school, I guess the next thing is, you know, go make a career and buy your house. And so you know, there's a lot of acquisitions going on and early in your real career. So you need money. But very quickly, I realized, and that was just, it wasn't a tactic. It's just how I am, is I would generously provide. And I remember the first time that this work, and the gentleman turned into my mentor. So he's, you know, 6'3", 9 kids worth $100 million at gold mines and oil wells. And

John Jennings 
why does six three come into it?

Ryan Miller  
I don't know. It's just large. Just

he's a lot. So

John Jennings 
How tall are you? 6 feet. Yeah, so yeah,

Ryan Miller
he was just I'm just like, Who is this guy? Like, literally, you're an outlier and everything. And so. So when I talked to him, I found out that he was building 132 megawatt power plant in a local area. And so I said, Hey, man, I just graduated grad like this guy could have hired Deloitte could have hired anybody. I said, Hey, I just finished grad school, I will build you the nicest financial model you've seen, I mean, not only will it be accurate, this thing will be a piece of art, like you will be super pumped to show this to your investors, it will be beautiful, and it will be effective and dynamic. And all these things I said the best part is I won't even charge you. I have which trust me at the time, I really wanted to charge them. But I said, Look, I would just want to learn from you and your investors and your other partners. And so I walk into this room, there's billionaires, there's finance emissaries of Saudi, the Saudi Crown Prince, there's all these people in this room, very interested, I show them the model blow their mind, all that stuff happened. But the point is not what I did. But how I got in that room was from being a giver, exactly. Like John said, and this guy was so impressed. And I knew he would be because I gave him everything I had every ounce of education that John talked about, filling your mind with, I gave him everything I had, and charged him nothing. And I show up at his office in the biggest boardroom I'd ever been in. And it completely changed my life. Why? Because I chose to give and so by giving and that was the moment friends that two things happened. Not only did I realize that my generosity was an asset, but I also realized that it can actually change your career and in that moment, that change happened was finding money was no longer my goal, this is exactly what John's talking about. Just hit me just hit me brother. I love it. So by not making so pursuit of money can be okay. Having money is great. But don't make it a goal, I think is what we're hearing if you want fulfillment in the early days, I love that. Now, for the beginners, how do you not lose? How do you not get your clock cleaned? In the early days?

John Jennings 
Yeah, so I think I think a lot of it is is like, you know, losing is more like a mindset, right? Like you're gonna you're gonna have, you know, failures. And you know, I shared this story with you recently, Ryan that, you know, my freshman year in college, I went to TCU. And I made a 1.8. And a two point for lost my academic scholarship, and my parents yanked me. And it was like, at the time, I thought was like the worst experience of my life. And looking back, it was one of the best experiences. And, you know, we just discussed how my firm came out of the ashes of Arthur Andersen at the time, and like, this was horrible, my company is going under, what am I going to do, but I wouldn't have had the opportunity to start this company without having that horrible thing happen. And so I think it's how you how you react, and a lot of times, things that are negative end up being the most meaningful, there's this fascinating study where they took, they surveyed all these people, and they said, you know, think, think back to something's happened at least more than two years ago, that was really positive. And how did you feel about it, then? And how do you feel about it now? And how meaningful is it now? And the same thing with negative thinking about a very negative thing? How did you feel then how do you feel now, how meaningful and what I found is, is the positive things don't feel as positive now makes sense. And the negative things don't seem as negative now. So like, we have something that is known as having like, your emotional immune system, right? So we think that if something bad happens, it's going to be horrible, and it can be horrible, but we adjust to it is basically what happened. But then what they said is, is how meaningful Did you find those negative experiences and with a huge margin, people found in general, the negative experiences the most meaningful in their lives. And I think that's really something to hold on to, when things don't go your way, and you fail, and you will fail. And hopefully you learn from it, but then realize this will be you know, something that will end up being a positive or I'll take great meaning from it later. And essentially, you know, I have two kids 21 and 24. But you know, I have a very big interest also in like, how do you how do you raise kids in a fluence, you know, for like, for our families, and Clayton Christensen, who was a Harvard professor and wrote the great book, The Innovators Dilemma, but he also wrote a book on how, how will you measure your life, and in there, he talks about the fact that as parents that what, what maybe you should do is help curate failures for your kids. And think about, like, regardless of how old your kids are, you know, whether you're talking about a five year old or a 1520 25 year old, be thinking, like, what sort of failures should they have in order to be a competent, you know, fulfilled sort of person? And, you know, as bad as it is, you'd be like, Oh, well, you know, you know, I want them to date people, and I want at least one heartbreaking breakup, like, can you imagine, like, the first, you know, person that you meet and start dating, you end up marrying? Like, no, no, you need some breakups, right? So exactly. You think about that as a, as a parent of all the things and you know, you know, parents are always like, oh, I want my kid to make all A's No, like, it's great to have your kid bring home a C, and have to struggle through that, you know, and redeem themselves and, and try hard to get that grade up. Right. So it's where you're going to do it out. I made a few at TCU. So, yeah, so I think the way you don't lose is expect failure and plan ahead about, you know, how you're gonna handle it and realize it's going to be, you know, likely this amazing, resilient experience.

Ryan Miller
Yeah, I love that. And, you know, when I, when I, you remind me of, you know, I have children a little bit quite a bit younger than yours. So I'm just getting started, buddy. But one of the things I told my wife, just from a male and father perspective, is I said, you know, what, I believe in talking about raising people in affluence and the pursuit of billions and raising children in that environment. I said, I believe in the concept of what I called controlled struggle. Yeah. And by that, I mean, as a father, my jobs, obviously, by control, I mean, I scrub any scenario of danger. But I don't scrub it of struggle, because there was a an old movie from the 90s. I remember, I believe it's called higher learning. And in there, he talks about without struggle, there can be no progress. And I've never forgotten that 30 years ago. Without struggle, there is no progress. But with danger, there's no progress either. And so as helping people understand that and so here's what I found, right? So people listening are like, I don't have kids. How does this apply? Let me tell you, subjecting yourself to your own controlled struggle can help you level up. And so when that time comes that John and I are talking about that you just get your clock cleaned, right? You tried everything and it just didn't work out, right. Like for your moment with Arthur Andersen, we all have these upsets, whether it's in romantic relationships, in our careers, whatever that might be. That moment may be coming or it has already but one of the best things you can do not only for yourself, but to prepare your children if that's who you are in your life. One of the things that I have found extremely helpful is by subjecting myself to my own controlled struggle, so that when that day comes or if it comes either one, that you are not uncomfortable with struggle now danger, that's a different story. That's not what I'm talking about. Obviously, keep yourself safe.

John Jennings 
And this is so wise and what the psychologist educators say about this they, what they call it is is allow your kids to have affordable mistakes. It's exactly what you're talking about. Yeah.

Ryan Miller
So I run every I run every morning with my seven year old son in the Canadian winter is cold. But we're properly prepared. And it's controlled struggle. It's not dangerous. And it's controlled struggle. And literally, yesterday, we had people to people roll down their window and be like, You guys are awesome. What are you doing? It is like, minus 30 right now. So aligning to that not only does that allow you to really have a good sense to say, look, if you want to be healthy, if you want to get your money, right, first be okay with being uncomfortable. Now, that being said, I did, I did tease the audience that we're here to talk about institutional capital as well. So we talked to the beginner. So let's, let's really punch this thing up and get into the institutions sphere. So that being said, let's start with the market. What are you seeing out there as the chief strategist of a $15 billion trust? What are you seeing? What's your predictions? I know you're in Forbes all the time. What are you seeing out there?

John Jennings 
Yeah, so really, in my book, I'd like an entire chapter on predictions and expert predictions. And I'll tell you, so the market, the stock market, the economy, and even politics, it follows something that was known as a complex adaptive system, and what a complex adaptive system is, when you can't tell the nature of what the output is going to be based on the inputs. And this happens, because in the stock market, the economy is because you have all these intelligent actors, you know, people firms, and everything, that learn and they can change the behavior. And they, they change their behavior, because of things that happen externally. And then they're watching everybody watch everybody else, and then it creates real effects that cause feedback loops, right? So I mean, if you think back to like, you know, AMC, and GameStop, and everything, right, so, so basically, you know, you had these these people on Reddit, I think it was the design, okay, you know, let's make this the stock go up. And, and they did, and then more people were buying, because it was going up, right? It, there's like no fundamentals, they're just like, we're going to buy because other people are going to make it go up, right. So we've all been there with this sort of thing happens. But then it causes real effects, like what AMC did, which was fascinating, is they raise more capital, you know, it probably helped them survive, because these, these people on Reddit ran the stock up, right? And, and then there's this feedback loop that people see make money. So they make Alright, so anyway, that's, that's kind of how the stock market operates. And, and what what it means is, is that it's inherently unpredictable, it just absolutely is. And, you know, nobody was predicting the pandemic, when it happened, or a stuck boat in the canal. And people were expecting the war with Ukraine. And when it happened, people thought it was gonna be over really quickly. And they didn't the what's been going on with Israel and Hamas that wasn't predicted. I mean, none of this was predicted. And it kind of reminds me of, you know, back in 2011, there's an investment manager, we use it to that deep value, we use their international product, right? And I remember, like, 2010, they were like, oh, you know, we're overweighting Japanese stock because we think they're undervalued, we think Japan is really set themselves up nicely for growth. And they're just going to do great. So you know, we're doubling, you know, the ephah, in terms of our Japan allocation. And of course, in March of 2011, there was an earthquake caused a tsunami that slammed into the coast and the Fukushima reactor, and you had all the devastation, and basically, it tanked the economy and the Japanese stock market with it. And a few months later with a call with his manager, and we were kind of nicely I mean, we're not decks, we're, you know, we're from Missouri, you know, Midwest has Midwest value. We're like, kind of like, you should the bet, you know, you know, what a bad call. They're like, No, no, no, no, it was a great call. How are we going to predict an earthquake? And the point here is, they're missing the point, like, you don't get a mulligan, because earthquakes, wars, pandemics, terrorist attacks, both stuck in canals, like you don't get a mulligan for that. That's that's the point. Right? That that it makes it unpredictable. So what we tend to do is say, we don't know, and the power in that, and I'll tell you, it works extremely well. So like we're working in the mainly 100 plus million family crowd. And we're going up against all the time here, the Goldman Sachs, the other big wire houses Bessemer trust, and other multifamily offices. And what we say is, we don't know what's going to happen, and we're going to invest like we don't, and everybody else is gonna be running around predicting this or that. And they continue to predict and they continue to predict. So long winded answer of saying, we don't know, but I will tell you based on past history, so if you go back to like, 19 2016, you roll it forward, the stock market's been up 70% of the time, I just wrote an article in Forbes on this, and what my stock market prediction is, and my stock market is it'll probably be up because it's usually probably up. And it was my same prediction, by the way that for prior years, right every single time, because it says probably be up but it might be down. So even in 2022 was down 18% was like what it could have been down and it was right. So it's actually really useful to keep, you know, keep that in mind. But you may be like, Well, what about when the stock market's up? 20 plus percent? Well, when the stock market's up 20 plus percent. The following year, the median return is 11.1%. And it's up about 65% of time. So again, I don't know what are interest rates going to do? I don't know if like if you put a gun to my head and said, You have to bet I'd say I think they'll probably drop this year. But most people didn't see the historic, you know, 5% increase in interest rates over by the Fed over 15 months, they didn't even see it. They didn't predict this. And if the Fed can't predict interest rates, then how can you now if you work with a financial advisor and investment expert, ask him, What do you what do you think interest rates are going to do? And if they tell you, you should almost be like, not the advisor for me? Because they probably didn't say two years ago? Oh, you know, we're gonna see this historic rise and rates is going to give us the worst return in bonds in the history of the world. They just weren't. So my answer is, I don't know.

Ryan Miller 
I love it. So it might be up, it might be down. I love it. In all seriousness, you do bring up a good point is to say, hey, and you skip past it. And I don't want to miss this, folks. So what John said is, hey, we invest, we just no ego, we just say we don't actually know we can't predict everything. You don't get a mulligan, if there's a war, or some inflationary event or an earthquake. So if you can actually admit, you cannot predict it to any serious degree. And you change your investment thesis to reflect that to say we invest as though we don't know, we know, finance, and we know what we're doing. We could find, you know, where's the profit and growth rate? So we can get a sense of how much meat is on this bone? As I like to say, Yeah, but in reality, when you're looking at the systemic risk, or the beta or for you know, some of you quants out there, I know I see you. So some of you predicting some of the systemic risk is saying, it's really hard to predict that. And so if, if you change your investment thesis to reflect the fact that you're saying it's hard, but that doesn't mean we can't invest, it just means we need to stop trying to make individual calls, and start trading more on macros, and around that and just say, look, it could go up, it could go down. This is where hedge funds sometimes come into effect. But regardless of how you manage the known unknowns, there's also unknown unknowns and appreciating those, that whole sphere is high finance, it is maturity in your investment thesis, and it is how do you manage a $15 billion family trust? I absolutely love that. So it's anyone's guess, where the markets at where it's going? So I absolutely love that.

John Jennings 
Yeah. This doesn't mean that you can't be smart about, you know, investing, I mean, because a very powerful, powerful law of the universe is regression to the mean, right? So it's not like you can't like you just sit there and you do nothing, and you throw your hands in the air, and in the fact that the market will probably be up this year, and over the next 10 years, it almost certainly will be up and over the next 20 years, it will definitely be up. Again, I say that, obviously, you know, we could have something that you know, we could be something like we're in Japan in 1989. So, so I'm not saying that, you know, the past is an absolute law, but just playing the probabilities, it's almost certainly going to be up over 20 years and 10 years, but it's not that you can't do anything, but it does tell you that if you're sitting on cash, you probably shouldn't. And I'll tell you, so I've a buddy, that his his family, they sold their company in early 2023, for a lot of money, you know, hundreds of millions of dollars, he started his own family office that he runs is super, super smart guy, but he was he was working in the business before. And even though he has a business degree, you know, he doesn't have a lot of hands on experience with investing. So I've been helping them. Right. And so, you know, we put together you know, some asset allocations and introduce them to some different you know, investment managers and things like that, you know, our firm we have, we often work with families when they have an exit from a business, that's number one reason, hopefully before the exit, because we can help with some more of the the tax and estate planning and, and even the cycle psychology. But, you know, sometimes it's afterwards. So, you know, in our 21 year history, like we've, we've helped families invest, you know, I don't know, five or $6 billion of cash. So it's a tons we've seen what works and what doesn't, and really, what what works is, you know, you typically, you know, even though the odds are in favor, let's just go invest it all in one day. But it couldn't go it's March of 2000. Or it's, you know, it was October of oh seven so you know, your if it's your one big bite at the apple, you're you're better off usually spread it over a year or 18 months or something. So, you know, the best way to do this is you pick a day on the calendar and say I'm gonna do this percentage this day and this percentage this day, this percentage to this day, you're kind of over your your time period. And when you do it come hell or high water. Okay, so it helped me my friend, his, like third tranche to invest out of I forget if it's like four or five, but it's a big Traunch investment is on Halloween, and every tranche, we have a morning call, and I say, Come on, Dave, like you're gonna do this. I know. It's scary. I know. It's hard. Trust me do it. So on Halloween, we have this call. He's like, I'm not going to do it. Everything's horrible. Remember, you know, the interest rates were going up? And it's like, Are we finally sliding into recession and the stock market was way down from its mid summer high. And he's like, I don't see any any reason why to invest. Now. I said, I don't even I don't know what's gonna happen. But I do know that you can control yourself. You have to follow discipline. Come on, hold your nose, do it, do it. He did it and look at what happened in November, November 2023. The stock market had one of his best monthly returns and 30 years. And so we talked on December 1, and he said thank you so much. Like this has been amazing. My family made so much money this month. And I'm like I know and it just shows you You can't, you cannot possibly know. And I'll tell you, I don't know if I could have done it, it was my own money. And it was 10s and 10s of millions of dollars. And, but I'm an advisor, and I can advise and I can help people do the right thing, right. I love that. So the point is, is, it's just really hard, it's really hard to know what's going to happen.

Ryan Miller 
Yeah. And investing like that, and appreciating that fact, can really help shape a very effective thesis. So as we round third base, let's really help our listeners to level up, according to John Jennings, so what would you say are two or three things that you could really leave behind as far as cheat codes that really help people understand, I don't know, raising capital, how to allocate it, anything at all,

John Jennings 
you know, I'll speak as somebody and as like you said, we're sort of like an institution. And we're, the way we invest is closer to institutional than if we were single family office. So let me explain a little bit of psychology of like, the difference between an ultra high net worth investor or maybe someone that has their own single family office, and then like us as a firm. So like, like, if I was, like, one of our clients, and I had my own single family office, like, I could direct how things were gonna be invested or hire somebody to help me do it. But if something did really poorly, like, I wouldn't fire myself because my money, right? And if, if I, if I do direct investing, do invest in a business that goes to zero, I'm like, Well, you know, I tried, right. But when you're investing money for other people, there's, there's two things at play. First of all, you feel like I feel a deep sense of responsibility for our clients and their assets. And like, when it's when it's down, like, I feel really, like, I feel really bad, and I feel really responsible. But a second thing also is like, we're also in business to make money. And people have tend to have short memories. And like, if you're down to many years in a row, you get fired. Or if you put them in and say oh, let's put a million dollars in this, you know, this restaurant, you know, how to how do you how do you create a small fortune, you serve a large fortune and you invest in restaurant, but or, or, you know, whatever business do you do, and it goes to zero, like you as an advisor, also running a business, you're like, I don't want to get fired, right? So so you're in a situation where you're not going to invest the same way. Maybe you would invest yourself, if you were in their shoes, doing it for yourself, right, right. Because so so what we do is, you know, we're more methodical, like when we do private investing, which we do quite a bit of private investing, but we're like, Okay, we're gonna, we're gonna invest in funds, and we're diversified vintage gear, and you know, type and style, you know, we're gonna have our, you know, our buyout and our growth equity and venture capital, or private real estate, etc, we're going to do this, and we're typically gonna invest in funds that have a track record, you know, that have worked together that have shown some success, because there's, even though there's basically no persistence for public stock managers, you know, from one period to the next, there's pretty high persistence for, you know, private managers. And so it makes it a challenge. So for, for newer funds, it's really hard to get someone like us to allocate to you. Because even if you're going to be fantastic, there's more risk for us, not just even just for our clients, but also for our business, right? And here's why if you, if you hire somebody else to invest your money, you're gonna get returns that aren't like this, they're gonna be more like this, right. And it happens with stock managers, you know, people are buying and selling stocks, and you see this over and over again, is, you know, they'll give up on their discipline, before they'll get fired by everybody. You know, it's like, we have this this managers, a great manager, that we use them for small cap growth, they regard managers, so that was growth at a reasonable price, right. And, you know, forget that you're probably like 10 years ago, but they had been producing all these really strong returns beating the small cap growth index. This was back when small caps beat large caps, it was like it was it was amazing. And like, one year, they like made like this 55% return. And the next year, you know, not good next year, not good. Six months later, not good. It was because that small cap growth during this period, a lot of the lot of tech and biotech companies were really leading the returns and growth at a reasonable price means that you're not willing to buy companies that don't have, you know, positive earnings, which a lot of these companies had, and they sub advise to a mutual fund company. So they managed $3 billion, 2 billion of it was with a mutual fund company in a few different funds. And the mutual fund company fired them, and then went from 3 billion to 1 billion, and then people started leaving, so we fired them. And everybody else fired them. And they went out of business. And this is a manager that had a very good process and discipline. They were great. I have like little doubt that they would have returned to do really good in the future. But they went out of business. And it's because they they stayed by their discipline too long. I mean, and yet, that's what you have to do to outperform. And we actually prefer even on the public equity side, we're going to do an active manager, a lot of them have lockups. If you were like, Why would you do a lock up with a public sock manager and we're like, because it allows them to do what they see is the right thing to do without having to worry about you know, clients, you know, pulling money out so so just just realize that that's part of the reason it's so hard to raise money, you know, from from institutional and why they want that and it's why you see big pension plans is They're only doing the other KKR is in the Palos in the Carlisle's, and everything. And it's because first of all have a lot of money to invest. And second of all, it's a sure thing, like, you know, we don't care if we're right around the median in terms of private equity returns, it's good enough. And, you know, we want to take the risk of going into with a smaller and newer fund,

Ryan Miller 
and we'll work yeah. And you know, you and I've talked about, and you've told me a little story of a study that you've read about endowment funds. Oh, yeah, yeah.

John Jennings 
I actually did the study.

Ryan Miller
Oh, you did the study. Okay.

John Jennings 
So what happened is, is, you know, everybody, everybody wants to invest like, you know, the topic, dammit. So it's called the The Yale Model, the endowment model. You know, as you point out, Ryan, you have the book, you know, David Swensen. He's the Chief Investment Officer at Yale. So we published it in 2000. And basically said, the way Yale has been able to be the number one endowment and you know, really provide these just amazing returns, is, you know, we do less in fixed income, we do more in alternatives, you know, especially like private equity and venture capital, private real estate, you know, these people run around by, you know, timber all over the world, and things like that. And what happened is people wanted to emulate that, like, Oh, here's the recipe for higher returns, right? And I think it really made its way, you know, beyond just the nonprofits that dominance in the pensions, and it made its way into individual, individual investors. And I think what's what's fascinating about it is, you know, if you go to your broker at you know, Morgan Stanley or whatever, I could pick them any of them, like, what are the chances that they're going to put you in the sort of stuff that Yale does, or Stanford or, you know, Penn or Washington University, where I teach has been two years ago, they're the number one endowment return the been top five each of the last five years, and like, but But what Swenson said when he did the second edition is book in 2009 is, is very few institutions, and even fewer individuals can afford to put forth the resources or have the access to replicate the sort of returns. And so what I did is there's this study that comes out every year from the buco, which stands for the National Association of College Business Officers and Tia from Tia craft. And what they do is they serve a, I think there's 735, University endowments, most of which are north of a billion. And they say, you know, what are their returns. And I did this a year ago, so I haven't updated it for the last fiscal year returns. But what we found is I took us a simple 7030 index portfolio, so it was the All Country World Index X us, it was, you know, the basically Russell 3000, and then the Bloomberg x. So those were the three things 7030 equity, fixed income, and then compare it to both the median and the average returns of university diamonds, and they were indistinguishable, exactly the same for one 510 15 years, I mean, within within, you know, 10 and 20 basis points. And what that tells you is for every Yale and WashU, and Stanford and Penn that's out there that's killing it. You have all these other institutions that aren't and realize that they all have professional staff and or have, you know, expert consultants and everybody's running around trying to generate, you know, outperformance and really all they had to do was have a 7030. And they'd be at the median. And in fact, I, I'm the chair of the, the WashU, Washington University's endowment. He actually was out in San Francisco, and he used to be the Chief Investment Officer at Stanford when they were, you know, the whole time he was there, there was a top five returning endowment. And you know, what he did is he came in, you know, what Washington versity was kind of having these kind of median returns, and he basically fired everybody hired a new chief investment officer and staff. And my name's Eric UPenn. Amazing guy. But he said, one of the things they really look closely at is whether they should just do a 7030 index. And then they ran some numbers and said, Well, what if we levered it, you know, 1.1 times 1.2 times and like, if you levered a 7030, index portfolio 1.2 times, again, it'd be, you know, you'd almost be guaranteed to be a top decile. university endowment is what you would be. So it's pretty fascinating. And, and there's another, there's another paper that was was done called What would Yale do if it were taxable? And I said, yeah, the the Yale Model, and these endowment models are great for nonprofits like like these university endowments or pension plans, but what happens if you have to pay taxes and what they did is they they reverse engineered based on yield the returns and the asset allocation, like what their assumptions were, and they said, Now let's, let's add in taxes, and what they found is, is that they would greatly increase the amount of public equities, especially their index fund, that they would get rid of their hedge funds. You know, and basically, it was this much different allocation than the university endowment. I think one real blind spot in the industry, advising ultra high net worth clients is is advisors don't see the taxes usually like we're multifamily office, we are very involved in getting the taxes done, we review all the tax returns, we see them, we give our clients reports on taxes, and unless you're seeing it, like you can look at a like a, like a gross of tax return, you're like, Oh, that's pretty good. So even if you're doing the endowment model on your, you know, right at that 7030 Or maybe a little better, you're like, look, we're killing it, you know, but the thing is, is that after taxes if you're investing like an endowment, it's like a bloodbath, right? So I think every time you look at anything you gotta say, I'm gonna tax adjust it. So like we invest almost nothing in hedge funds, and it's because of how tax inefficient they are. And I guess we never invest in a hedge fund, but we're really skeptical the hedge fund because of the of the tax hit. There's different types of alternatives. So, again, you know, private credit is a big deal. And again, you gotta you got to run what the taxes are on private credit and say, Is this worth the lockup on an after tax basis? Right. So I think that's, that's incredibly important when you're working with ultra high net worth investors, as opposed to a nonprofit organization,

Ryan Miller
you know, and just to echo on that, I'm sure you get maybe some emerging fund managers, I'm just hallucinating here, but you know, it would be putting myself in your position. And so when you've done this study, and you find out say, you know, really active management, it really comes down to a 7030. With with some of that from the endowment side, and then you may have some, so we're talking about pitching people like yourself, and so if these managers come in, and they're like, we're gonna outperform the market. I would just imagine you if I was in your shoes, I'd be like, really? Okay, I gotta hear this

John Jennings 
To outperform, you need one of three things? Yeah. Okay, here's, here's the thing, if I, you'd have better information than the market, or the other people. Yeah, you have to have better analysis, or you have to have better behavior, right? And on the public stock side. And I like to ask this to public sock managers, you know, which of the three do you have, and it's almost impossible, I better information, public sock, if it used to be the case that you could get you get veteran rage. That's, that's basically gone now. So is that better information? Yeah. Better analysis. Okay. So some firms are like, we have better we have better analyst, we do better analysis, maybe. But the problem. So the problem is, is that we only know our experience, and it makes us overconfident. And we know that we're good. And we're smart, and we're doing a great job. But like, the seat we're in, and we we, you know, through my career, I probably talked to, I don't know, 400, you know, public stock managers. And at first, like the first one you meet, you'd want to give them all your money, because you're like, oh, my gosh, you are so smart, your your analysis, your style is so good. And it'd be like, if you ever met one NFL wide receiver, you'd be like, Oh, my gosh, this guy is gonna be like MVP, like he's tall, and he's fast. And He's strong. He's got these great hands. But like, once you've met 100, wide receivers, or 100, quarterbacks or safeties, right, you're like, Oh, do they're all playing against each other. Right. And that's how we kind of work with the public stock managers is, it's really hard to have better analysis. And once you you meet with 10, or 20 of them, you're like, okay, they do have some differences, but they're all really smart. Okay, so really, what you're left is the better behavior, right? And where we tend to hire public stock managers is where they have the behavior piece, and they say, Yes, we behave better. And that's partly where the lockup comes in. Like, it allows them to behave better, because they don't have to be subject to the whims of their investors taking money in and out. And the same thing is true in private investments. And but there's a little different, like, you can't have better information, right? And maybe in a particular industry. And again, it's because, you know, if you're going in to buy a company, like if you're in the business of buying companies, and you're buying from a family that has had one company, and this is their one cell, and a lot of them are like, Oh, I don't want to pay an investment banker, right? That idea, you should have an investment banker, right? I see it all the time. Our clients are like, Oh, we're going to sell our business, we don't think we need to pay, you know, three, four, or 5% to an investment banker, like no, you absolutely do, you will absolutely get your money's worth. Because, you know, there's this almost information, a cemetery, somebody that you used to buying businesses versus somebody that doesn't usually sell businesses, and you can know more about their business. And this is not insider trading, you can you can dig in and like, so there's, there's this ability to have better information, maybe even better analysis, and definitely better behavior and private investing. And I think, really, as a private, if you're a private investment manager, and you're selling into someone like us, it's really explaining, you know, kind of what that is, and you know, what's your, you know, what's your differentiate? Ater? Like, what, what, are you doing this different than just the guy down the street? And, you know, can you prove it's correct. And, you know, a key thing that we look for, especially for like an earlier fund is, you know, really the quality of the people. Yeah, I mean, we're investing in people always, like, that's what it is in private about, you're absolutely investing in the people. And we're like, where are these 10 things that we go through, whether it's a direct investment or fun, like these 10 flags that we look for number one is the person and you know, you know, the whole Peter Thiel thing, his books are the one he talks about, you know, like secrets, you know, and it's in the blue section, I know,

Ryan Miller
A lot of blue books in my background,

Speaker 2 
but when he talked about secrets, and like, you know, and Ben Horowitz of Andreessen Horowitz, this is this great, you should google it. He did this commencement address at the Columbia University School of Engineering, I don't know, probably eight or 10 years ago, but he taught he puts it so eloquently. He's like, you know, if you come to me and Andreessen Horowitz and go, I have this great idea, am I doing is something to make batteries last longer, and like cell phones anything like that's a great idea, and I'm not going to invest because everybody thinks that's a good idea. You know, Panasonic and Sony and Samsung, everybody's all working on that. But he tells the story of Brian Chesky when he comes in, like I have this idea. And it's, you know, I'm going to run out and I'm going to rent out an air mattress in my guest room. And these are in my secret my Ben Horowitz tells us so much better but my secret is it used to be that you know, there were like you only traveled kind of like by horseback and you knew the quality of the ins kind of around your area. You'd ask around. It was only once we had, you know, cars and airplanes and trains and everything that you needed like Howard Johnson's and Hilton's and Marriott. So you know the quality of where you're gonna stay. And we don't need that anymore because of the internet, right? So you can have pictures and reviews. So you know, that launched Airbnb and like Ben Horowitz was like when I first heard this, I'm like, this is a horrible idea. But he invest it because it was different. So the key there, when we talk clients all the time is like, our client will get excited by an idea. Like, you don't know what a good idea is. If it sounds like a good idea, it's probably not a good idea, right? So so what that leads you to look at are 10 things. The idea is number 10. So the people is number one. So you're investing in the people and you hope the people have the craziest idea, like luxury electric cars, or build your own teddy bear. Like something that sounds so ludicrous. But you're investing in the person like build your own teddy bear. I say that because Build A Bear was based in St. Louis. And the person who created it had this long career in retail, right? And like she knew she knew retail, like so well had successes had failures, and people were like, We're gonna invest in her. Even though the idea seems crazy, like, why would you pay to build your own teddy bear? And obviously, it took off, like 5000 stores? Damn, so So that's, that's really what we get into. And so as the people so how can you put your people forward? I'll tell you a key thing is if you have fun, you know, we love the number one thing is, do you have a lot of skin in the game? One of them is like, if a fun comes in, and, and I understand early on, you're not gonna have like, this much wealth, but when a fun can come in, and they're like, oh, you know, 10, or 20, or even 30% of the fun is made up of employees and the GP were like, Okay, that's awesome. We love that. Or if it's, you know, your your newer, but you're like, yeah, basically, almost all my net worth is tied up in this fund, like we want to see the skin in the game, it means that you believe, because the thing that I think, you know, really damaging about this industry. So industry, just investment, wealth management is all about playing with other people's money, right? And if you're like, No, it's my money, too. That's so key

Ryan Miller
I love that. So having skin in the game now when it comes, so you're kind of dancing around this, and I want to dive a little bit deeper. So if somebody comes, right, so we have a lot of emerging fund managers that listen to the show entrepreneurs, anyone, especially anybody raising capital, that could be any of those groups. And so when it comes to pitching a family office, what have you found works or doesn't work? What advice not only from your personal experience, but maybe as someone trying to pitch you What have you found nailed it or and blew it?

John Jennings 
Yeah, so I'll say like, I get so many emails and and again, we're a multifamily office. So we're out there, like we're marketing, we have a website, you know, we weren't, we weren't getting, we like to add three to five client families a year. So we're like, we're in business, single family offices are very different. They're They're very, you know, usually very private, it's hard to get any information on them, you're not gonna know how much money they have. So, you know, like, Ryan started out, say, like, we're a little bit more like, the institutional money, but I get, I don't know, how many emails a day from investment managers, and also, you know, playing charters and art people and all this stuff, and, and I get it, but like, I'm not going to answer those emails, because I've spent my time answering those emails, I wouldn't have any time, you know, like, the cold calls the cold emails, like, they don't work like, like, even if somebody's like, oh, you know, we're delivering these amazing returns, I'm like, Yes, everybody has amazing returns, at least in their marketing. Of course, you know, in their past this one strategy or whatever is like, I'm sort of skeptical, a little cynical, right. And the only time I will actually even read an email or respond to it is when they start like in the subject line, or right away, like there, if somebody sent me an email and said, basically, the subject line right away, I read your book, and I thought was fantastic. And here's three things I learned, I'll be like, oh, please spend five hours reading my book, I'll spend some time, you know, interacting, or whatever, or, you know, I have this, this of a blog that I produce, do twice a week, be like, Oh, I read your blog posts on blah, blah, blah, I thought that was great. I'm like, oh, it's making more about me, or if they're, like, you know, here's what we can do for your clients. But still, like, even even that with emails, I can't think of a single, like, personal email me, even if I responded, that we actually even took a deep dive to allocate capital, it's because there's so many other things out there. And as great as you may be, there's a lot of other greatness, and it's hard to, you know, separate out, you know, what's what's what, and then, you know, I go to some of these conferences that are like, oh, you know, this family office with a family wealth conference, like truly family, like single family offices are almost never there. Like, they just aren't, like, the only time I'm around, you know, a bunch of ultra high net worth people that have or when to have single family offices, you know, I'm involved in, you know, YPO Young Presidents Organization YPO goals, I'm over 50 Now, but, you know, we have a, we have a family office network, and I'm involved in that, you know, and there's very strict code and like, YPO that, like, you're not there to market you can't sell, right? So if somebody wants to contact me, great, but like, I'm gonna go get the list of people that were there and start typing and stuff or, or, you know, whatever. It's about, you know, relationship building. So, you know, really, really the, the way that the times that, you know, we've actually met with a manager that kind of reached out is when, when it's through someone we know, or one of our clients. So like, you know, I've met before where a lawyer has said, hey, you know, would you meet with these people, and I know what the kind of the lawyer is doing like for they'll have some sort of vested Interesting, this investment manager, and they're like, Hey, we're coming to St. Louis, you have anybody to meet with. And it's kind of a more of a favorite lawyer, because it like makes him look networked and good for them to come in and meet with a firm of our size with sort of clients we do. And so I'm kind of doing it, you know, lawyers like calling in a favor, right. But our clients all the time, are bringing stuff to us, and we'll look at it like, and we're like, yeah, we'll give it a an absolute shake, but it's got to kind of come through a class because we just don't have the time or the bandwidth to be just, you know, wrestling down everything that, you know, we get, you know, get pitched or, you know, pings us. So it's, it's really a relationship business. And in terms of getting into single family offices, let let this really, it's just really hard. They're really private, like, we have some clients that have single family offices, we like kind of fill in the gaps and, you know, support them. And, you know, we'd love to work with more single family offices, but there's no like, Great list out there. And even if there was I know enough that I'd be like, Oh, we're just going to email single family offices. So you know, really, for me, and why I speak at a lot of events is, first of all, I love to speak. But I want to be like, Okay, I'm gonna give value out into the world, I'm just gonna put it out there. And if somebody if my message resonates, give me a call, but like, I'm not paying anybody, right. And it happens sometimes. But what I had to do is I had to do a lot of study and research, and spend a lot of time and I've used speaking coaches, and I practice, you know, eight or 10 times, before I give a speech, like straight straight through, because I'm like, I'm gonna, I want to create an amazing, amazing speech where people learn a lot, and they come away going, I really learned something. And, and if nobody ever calls me, that's totally fine. But that's kind of how we tried to get into, you know, the ultra high net worth single family offices. I mean, most of our, you know, we're almost exclusively referrals, we rarely get calls just like, Oh, I heard you speak or I read your book. I mean, it happens. But it's mainly you know, we share a family with a lawyer, and then they have another family. And I'm like, oh, you should call, you know, St. Louis trust, or an existing client, Whoa, you're exiting your business, you should go to my advisor, and they work with families just like ours.

Ryan Miller 
Awesome. And cold call sounds like cold calls don't work. I knew. And I've, we've exchanged some, some scar tissue on this one. But very often, and same with me, folks. So I obviously invited John, just through our own relationship, but often, you know, having a Top rated show, or a large institutional thing, it attracts people in that industry. And often it's the exact same thing. If I can echo what John's saying, even from my own experience, a lot of people want to support me and help out and it's so kind of them to do that. But not I'm it's just not possible for me to answer everybody. So the ones that get an answer in John, feel free to disagree on this, from your experience and on your side. But the ones that I give an answer to is exactly what you talked about, man. They they lead with a give, right? We talked about being generous, and being a giver, and some of it someone's like, Hey, I've been a big fan of your show. I went ahead and gave you a review. And it's an honest review. I love it. I actually my favorite episode, is this where you talked about that? And I was like, What in the this is my talking to? Is this fan mail? What's happening right now? And yeah, and and so they actually talked about it, and they were a PR rep. And they wanted someone to come on my show. And I was like, Absolutely. Now obviously, they still have to meet some requirements. But the ones that get is they lead with a given even if that's a compliment, that's they they like to social media posts, if that's who you are, whatever it is, find a way to add value to contribute to add anything at all right? Like John, I, hey, I read your book, John, I really loved this chapter where he discussed XYZ. And that reminds me of a thing. I'd love to talk to you about that thing. Oh, okay. Well, you definitely have my attention. So I can't impress this enough. And the other thing that you alluded to John, and I don't want to gloss over this just for our listeners sake, you and I know what you're talking about. But I really want to really underscore this is that some of these events are a waste of time. Now, last May I spoke I was with Ed, my lead and Jim Rogers and Jen Gottlieb and all these these people on stage, and it's about 35. So some are great. Some are great. Yeah, some are great. And I was on stage. And I said, you know, I totally set him up for this. But I said, Who here has been a local networking event? 3500 emergency fund managers, everybody raises their hand, right? That's a lot of people. It's a good sample size. And I said, Here's raise money from them. I swear, John, you could hear a pin drop, not a single hand went up. And I was like, why do we go to these things? And the problem, the reason why we still go to these things and don't raise any money or don't progress our business, whatever it is, is because everyone there is just as bad as you are everybody's going to take. And so guys like John or guys like myself, who are allocators, we don't go to those things, because everyone's like, shoving their business card down your throat to hire me to be your accountant, your lawyer, your dry cleaner, your personal trainer, your landscaper, you're just like, oh my gosh, this isn't even fun. And so these networking events are not great. If you're trying to find a family office. You might Sure. But in finance, we play statistics more than calculus. So the probability of what John and I are saying it's probably kind of low go into these networking events. So how do you get in the room with a guy like John? Well, he just told you, and I just told you start with a give. And it doesn't have to be money. It doesn't have to be a gift. Probably that would be weird, but something sincere that is what we're saying is show us that you've paid attention to our firm showed us that you've paid attention to me, like we're very easy to do. due diligence. And so doing that and leading with a give and that spirit of generosity, I'm telling you, folks, and John is telling you the same, it can literally open doors for you. Would you disagree?

John Jennings 
No, I totally agree. I think it's great. It's absolutely, it's tough sometimes, like, you know, how do I, you know, how do I act as a, you know, a giver, and it comes back to the, you know, almost, you know, don't put seeking money or seeking status or, you know, fame is your thing? Like,

Ryan Miller 
We can smell it on you if it does

John Jennings 
you can totally, you know, as you put a smell it? Absolutely. So, you know, I think it's so important to be like, you know, be passionate and believe in what you do. And you know, isn't it there's this, this article that was published, I don't know, a year or two ago, and some sort of a periodical for, like people out in Silicon Valley and never heard of it, somebody forwarded to me, was called choose a good quest. And it was, it was really, these two people wrote it, it was kind of a screed against a lot of people in Silicon Valley, that were, you know, creating things, basically, because they wanted to make a lot of money. And what there is a great article, if you Google it, you know, choose a good question. Silicon Valley, it'll probably come up. But they talked about, like, you know, you got to think to someone, do people really need another dating app or another, like, video, social media app? Or, or this or that, like, you know, and I think like about Mark Zuckerberg and like, like, at the end of the day, is it maybe somebody else would have done it too? But has he chosen a good quest? I mean, look at look at what social media has done to the fabric of our lives? And what is done to our democracy? Like, yeah, like, has he chosen a good? Has he chosen a good quest, and I think part of it is, is whatever whatever company or business you make, like you have a non financial reason for being and say, you know, I want to create a company that's gonna make a positive dent in the universe. And, you know, it's kinda like in Star Wars where the Death Star blows up that planet, you know, and like, you know, Obi Wan is like, you know, the force, just, you know, screen and, you know, that's the sound of, you know, like, a billion people dying or whatever, you know, you know, I want to have a company, that if it went out of business, that like, would disrupt the force. And in part, a part of that is, yeah, being a giver, and just doing the right thing, and all that, but it's also telling the truth, you know, and I think you heard that with my, you know, my market prediction of our entire book is telling the truth. Like, when I give talks on it, afterwards, there'll be people like in the financial industry, like afterwards, they're like, Oh, my God, that is the first you are the first person we've ever heard speak at an investment conference that has ever, like, completely told the truth. That's kind of, that's kind of our goal. That's, that's, you know, that's, that's our goal. But I think as you as you create your fund, or your business, or whatever, it's like, you know, we probably only have one life, right? So go do something good and great. And if you do, the money will follow. But like, Don't you like hindsight, you can smell when somebody's just chasing the money, or, you know, when somebody starts a business, it's like, because just because I wanted to be rich, and there's this up fascinate every single year, since 1965, a sampling of entering college freshmen has been done when they ask them all these questions and back, like in the late 1960s, like, one of the questions every year was talks about, like, what are your top priorities, like, you know, for your life, and, like college in here and out? And one of the questions is, you know, I want to create a, like a meaningful philosophy of life. Okay. And like back in, like 1967 1968, like 74%, of Indian college freshmen. So that was one of the top priorities, and also asked, you know, how important is it to be rich or financially successful, and back in 1967 68, was, like, you know, like, 30% or something? Well, those have completely flipped. Like, over time, you could just see them, like, the two there's, like, you know, converge. And now, like, I forget the exact numbers that it was last year, but it's like 80% of entering college freshmen say that one of their top priorities is to be financially successful, and developing a meaningful philosophy of life has done like 25%. And, and, you know, I think it's just a reflection of our society, I think social media makes it worse. And they always say, you know, we're all comparing our insides everybody else's outsides. And I think that happens, like you look at these people that are on Instagram, or Tiktok, or SNAP or whatever. And you're like, oh, look, look, you know, there have all this, you know, these houses, and these trips, and their lives look perfect. And I want that, so I have to have money. None of that is true. None of it.

Ryan Miller 
So would you say that that is, you know, it's kind of converging into a third helpful tip is some of the things you mentioned that are helpful to you. So you mentioned showing it was a pitching a family office number one, you said, the thing that impresses you is showing that the GPs have some stake in the game or the founder or whatever it is, it was a direct investment of startup or fund, whatever it is, show that you got some skin in the game number two, that you mentioned just now is show that you have a non financial reason for existing. Yes, obviously, you need profit. We know that guys, like if you pitch us we know you need profit.

John Jennings 
Elizabeth Holmes, why was she able to raise all that money and have like George Shultz and Jim Mattis and all these, you know, these people on her board and get the you know, Betsy DeVos and the Walton family and I think Larry Ellison invested and all these, you know, it's because she told us amazing story. She said, You know, as a child, I was always scared to get my blood drawn. And, you know, I'd have to have all you know, maybe she was sick or somebody she's like, I hated it. And so, you know, we're gonna go run all these blood tests with just a pinprick and, and she told the story of like, you're gonna be able to go into Walgreens You're going to do this entire array of tests. And imagine what it's going to do in emerging countries, it's going to completely change medical care in the developing world. Like, this is such a compelling story that people just started throwing money out, or even there was a fraud, like, and we can all learn from that not to be a fraud, but the power of like, she's like, I am going to change the face of medical care, and save millions of billions of people's lives by this new technology. And people were like, yes, let's back up a dump truck, pick whatever money you want, right. And I think we can all learn from that. And it's not the, it's the power of stories, and especially if their powers of stories of like, I want to make a dent in the universe. And like my dent, is I want to spread truth and transparency surrounding the entire wealth management industry. And then I want to help my clients live more happy, fulfilled life in the face of wealth, because it's like, you know, more wealth makes you happier, but also more wealth brings with it more challenges, more burdens, you know, you know, how to help people live? Like, like better, more fulfilled lives, even though they're rich.

Ryan Miller
Yeah. Reminds me of an old poet I used to listen to in high school Biggie Smalls, right? Mo money, mo problems, right. It was not him. And you know, and then what would you say just just to round out this thought on like, the things you like to see when when getting when some of the deals that you did end up funding? How have you found because there's some there's debate is out as far as people sharing their failures, hiding from them or being upfront with? How have you found? What does that mean, if you've got a GP or a founder in front of you that said, look, I've got this amazing opportunity have done that, I'm going to change the world, right? They got all those things, they've got skin in the game, they've got a non financial reason for existing, they're telling a compelling story. But then they're like, look, haven't always got it. Right. I mess it up. I had, you know, a couple good startups, couples that failed. Here's what I've learned, whatever that is, how do you find when people are open because you value honesty and transparency as much as I do.

Speaker 2 
We love it, we asked, you know, whether it's direct investment or fun, or you know, even a public stock fund, we asked about their failures, and you know, things they got wrong. And some of the things were like, you know, what, your What are you most most confident of that you, you know, you got wrong, and we want to hear that we love it when, you know, they're like, oh, yeah, my, you know, my 2013 Vintage fund was, you know, fourth, it was down in the, the fourth quartile. And here's why. And here's what we got wrong. And here's what we learned from it. You know, it's just so important. I heard I've this friend that, you know, runs a single family office, and but he also has a very successful, I think there were fun three or four, you know FinTech fund, and he was on his podcast, and this this podcast host. So great questions like, you know, what's your, like, Tell me some, some mistakes, he's like, Oh, you wanna hear about the zeros? You don't hear me tell you a few. And it was so fascinating. Because usually you don't hear people come on podcast, you know, when he was telling us the story, there's like, some average, you know, and, like, what he didn't realize is, you know, they had this great beverages great price, but, you know, like, they didn't realize the games that need to be played to get to the part of the shelf where the consumer would see it, like they were down on, like, in the corner. You know, like we didn't, we just didn't know, we didn't know that the company needed to play this particular game to get like, where you could see him, he just couldn't see him. So if you can't see him, you can't by him, you know, and it was just, that was one of the stories was just fascinating. But like, we want to hear that, because everybody like if you if you've done this for long enough, you're gonna have some failures, and, you know, put them out there. And here's what I learned from them. I will tell you, like, If all you've had is failures, yeah, that's a problem. But don't hide from your failures. And, you know, I'll tell you one thing that tipped us off, whenever we see, you know, again, talking about like public stock invest that firms, like when they're, when they're just touting, like their since inception number, and that's the issue, you can have a since inception and have that graph or whatever, that's, that's totally fine. But if that's the only thing they're hanging their hat on, it gives us pause, because like an early manager, like if you're starting and you know, you're managing $10 million, and you put up these huge returns, and then later you're managing a billion dollars, and your returns aren't as good. You know, you know, maybe your since inception looks really good, because you were either lucky or, you know, a different manager, or it was a different time period, when you know, you're you're killing it back when you were you were smaller. But if you look at how your investors have done, well, most of the money came in later. You know, so you're just looking at like a since inception, if you were there from day one, which almost nobody was, and yet, it's not that you don't have that, but you know, be honest, you know, about your, you know, be honest about your returns. And, you know, if you're coming in, don't just show, okay, I have three funds, and I'm gonna show the one that has a good track record now show all the funds, because we're gonna ask, like, anybody has any decent doodles, we're like, show your other shows or other funds. It's like, oh, well, you just made it look like you, you know, had discovered alchemy. You know, it's like, well, this one fun. You have these other two, you know, and that's and that's the game that's played in the mutual fund industry. They, you know, they seed five funds, and then they let them run for three years. And then they merge three into the other two at the end of five years. And, you know, we have all five star funds. Wow. So so so there's all these games that are played that were like, you're just better off, even if you're not playing that game, you're better off just nip it in the bud saying, Okay, we're gonna be completely transparent. Now we have this investment manager. It's kind of interesting. He only invests in banks and thrifts. It's kind of interesting, but every time there's a really bad month, I get a call In fact, I even say to him, like, like, Joe, you can stop calling me like, it's fine. You don't need to call me when there's a bad month, I appreciate it. Because he's like, we had a really bad month, let me tell you, you know, not just banks interest were down, but we were down more than the KW banking thrift index or whatever. And here's why. And here's what we learned. And, and, and I appreciate it. But other than that, like, you can stop calling me Joe, but like, I'm like, I trust this guy. But I want to put other people with him because I if they want to invest in just banks interest, but I trust him.

Ryan Miller
Because he's, he's straight up.

John Jennings 
He's, he's straight up and out, like 50% of the fund is his money.

Ryan Miller  
So he's got he's got those elements, right. So you know what he stands for? He's got skin in the game. And he's very clear.

John Jennings 
I mean, he used to be a bank examiner, he worked for the Fed as a bank examiner. I mean, it's like, his, his his, his understanding of banks is like uncanny. And what he'll say he's like, I have better analysis, analysis. So they'll tell you, everybody else is covering banks wasn't a bank examiner, and most of them are covering multiple industries, like any other firm you go to, it's like, oh, I'm covering banks. And this and this, and this is like, I only do banks, I only invest in banks. And I only, you know, I know about because as a bank examiner, and then I worked at a big firm, where I was the head analyst on, you know, on financial institutions, and I've been doing it a long time. And, you know, give me these younger analysts that are covering, you know, for different industries, and have never gone and closed a failing bank as a regulator.

Ryan Miller 
Man, I absolutely love it. This has been a phenomenal conversation, John, enjoy mixing it up with you, brother. As always. So just as we as we wrap things up any closing remarks? Any thoughts? Anyways, if there's people out there who have 100 million or more under management, they want to contact you ways to find your book. I mean, anything at all, anything at all?

John Jennings 
Yeah, just to leave behind like if you're, if you're interested in more of, you know, us, me or book or anything. My website is John John. M as in Michael Jenny's dot com All one word, John M Jenny's dot com and you'll find my blog there. It's called Interesting fact of the day, I think my tomorrow is going to be on a set of research papers. And it's kind of kind of known as ego ego ism bias or responsibility bias. But you know, one of the main studies is they took married couples, and they asked them, like, what percentage of the housework do you do? Like, what percentage of the childcare do you do? What percentage of like doing the dishes? And like the totals between the husband wife were way beyond 100%? Right? So, so each person was thinking that they do a lot more than the other person is because you know what you did, like you'd like I unloaded the dishwasher today. So I'm feeling pretty good. But you don't realize that maybe your wife did it three times yesterday, or, you know what, whatever. So it's, it's pretty fasting. So I write on just interesting things like, like out of my blog called The, the interesting fact of the day, I always loved New, new subscribers. You know, things like, you know, why did females have neither handwriting than males? Why do competitors like Lowe's and Home Depot or you know, Walgreens or CVS? Why do they often other stores together? So you know, just interesting stuff,

Ryan Miller
man, I love it. And I always like when you post them on LinkedIn, as well. And I definitely follow in like a lot of the things you put there too. So just to summarize everything folks gain knowledge, especially on allocating read a lot of books. And the second thing is learn the right way to pitch a family office, John gave us a whole discourse on things that work and don't work, and finally, have skin in the game a compelling reason for existing. And don't shy away from your failures. You do these things, and you too will be well on your way in your pursuit of making billions.

Wow, what a show. I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode where we dive even deeper into the people the process and the perspectives of both investors and founders. Until then, my friends stay hungry. Focus on your goals and keep grinding towards your dream of making billions