Podcast: Speaking of Quality: Wealth Management Insights with Hank Smith
Season 1 Episode 8 Title: Looking Back at Season 1 of Speaking of Quality: Wealth Management Insights
Host: Hank Smith, Director, Head of Investment Strategy at Haverford Trust and Maxine Cuffe, CFA, Vice President and Director of Global Strategies at Haverford Trust

Description: In the final episode of “Speaking of Quality: Wealth Management Insights,” Hank Smith and Maxine Cuffe reflect on highlights and key takeaways from the season. The pair explore Annie Duke’s concept of strategic quitting, Bob Pisani’s perspective on wealth advisors and index investing, the benefits of donor-advised funds shared by Rebecca Moffett, Eileen Chambers’ insights on culture and collaboration, and Jay Wright’s lessons on team building.

Stay tuned for our upcoming season featuring Chuck Jaffe, Dan Clifton, and more. Be sure to listen to past episodes and make sure to subscribe for future episodes. Stay Bullish.

To learn more about The Haverford Trust Company, please visit https://haverfordquality.com/.

Episode Summary
[2:16] Host Hank Smith and his co-host Maxine Cuffe discuss Annie Duke’s appearance on Speaking of Quality. The pair focus on the power of knowing when to call it quits and the importance of recognizing when to walk away.
[5:14] The conversation shifts to the Bob Pisani interview, the significance of having a trusted advisor in wealth management and the viability of index investing as an investment approach.
[7:53] The hosts delve into Rebecca Moffet’s episode, the shift towards unrestricted giving, and the impact of the pandemic on charitable contributions.
[11:10] The pair explore the career evolution of guest Eileen Chambers and her approach to difficult markets.
[16:06] Key takeaways from the conversation with former Villanova Wildcats men’s basketball coach Jay Wright are discussed, including effective recruitment practices and teamwork.
[21:12] The episode concludes with a teaser for Season 2.

 

Episode Transcript:

Maxine Cuffe  00:01

You’re listening to Speaking of Quality, Wealth Management insights with Hank Smith, a podcast by the Haverford Trust Company on Speaking of Quality, Hank chats with authors, influencers and wealth management experts to bring a sense of clarity and calm to the complexity and stress of personal finance. And now, here’s your host, Hank Smith.

 

Hank Smith  00:22

Hello, and welcome to the final episode of our first season of Speaking of Quality: Wealth Management Insights. I’m your host, Hank Smith. Joining me today is Maxine Cuffe, who is the voice of our introduction and conclusions of each of these podcast episode. Fun fact about Maxine. She’s a senior research analyst whom we hired eight years ago and she spent 10 years prior to coming to Haverford in the UK and specifically in Edinburgh. I’m threatening to send her back to Edinburgh to get that Scottish accent. But maybe you noticed she still has some of that with her. We had six podcasts that included Annie Duke, the first female World Series of Poker champion, Jay Wright, the famous Villanova basketball coach and Hall of Famer, Bob Pisani, a floor reporter for CNBC, Rebecca Moffett, the president of Vanguard charitable, and Eric Pryor and Jane Allsop the CEO and Head of Development for the Pennsylvania Academy of Fine Arts. And our colleague, Eileen Chambers. We covered many subjects. What stood out to you? Why don’t we start with Annie Duke since that was my first podcast. And I’ve got to tell you, my first podcast ever, and to say I was a bit nervous, even though I’ve had plenty of years of being on TV, being on the radio, doing print interviews, the novelty of doing a podcast was very anxiety producing, but she was absolutely wonderful. And it gave me a tremendous amount of confidence leading into the next five podcasts.

 

Maxine Cuffe  02:03

Annie was the perfect person to kick off your your podcast series, she’s so easy to interview because she’s got such an interesting backstory, and of course, so many lessons that we can apply in life and in investing. In the episode, you talked to Annie about her new book, Quit: The Power of Knowing When to Walk Away. It’s such an interesting concept, because we tend to think of people who quit as losers. And the people that persevere, they’re the ones with the grit. They’re the heroes of the story. And she starts off her book with this example of that tragic Everest expedition where a number of people died, including some really experienced climbers. I was actually in Nepal around the time of this incident. So I’ve followed the story for a long time. But I’ve never thought about it the way Annie frames it. The actual heroes of that story are the climbers that quit, because they survived, they stuck to their plan, that they would turn around at a certain time, if they weren’t going to make the summit. That’s what Annie calls kill criteria. And having that plan in advance, when to call it quits, is so that you are not making these stressful decisions in the moment. It’s kind of like having a stop loss, when you are looking to get out of a stock as an example. And you know, we use this in our own investing, we have our investment thesis written down, we know when it’s breached, we’re going to think about red flags on a stock. And when you set these systems up in advance, and you stick to them, because really trying to make these decisions in that moment, when you’re in the middle of a blizzard on a mountain, it really becomes impossible because of our emotions that make it so difficult to make smart decisions. And, and Annie really goes into this in her book. I would really recommend for our listeners to to read Quit.

 

Hank Smith  03:52

But it was also interesting because she admitted at the outset of the podcast that she probably should have retired much earlier than she did. So she quit too late. Because she was past the prime of her career, and wasn’t putting the effort and time that was required that the younger poker players were able to do due to online poker. So they could get hundreds more reps in at a time where she grew up playing on a table, which only allowed for a certain amount of repetitions, a certain amount of hands of poker. And I found that an interesting contrast to her book Quit.

 

Maxine Cuffe  04:39

So you know, as an Investment Analyst, we have to be really aware of all of these biases that we have, and how they impact us from making smart decisions. And one of the things that she recommends to do to try to overcome some of these is to use a coach or a mentor or financial advisor as a great example. Someone that I can see the situation more clearly than you can. And like Eileen says in Episode Six, Her job is to listen to our clients. So having someone that you can just bounce these ideas off, especially when you’re worried and you’re stressed is really important.

 

Hank Smith  05:14

And that was a an important point that Bob Pisani made in regards to his discussion on how he invests. And and specifically what he invests in. And I thought it was fascinating his observation that it is so rare that anyone asks an investment professional, what do you invest in? He never gets that question. And he wanted to include that in his book. And he emphasized that having a trusted adviser is very, very important to help you reach your goals.

 

Maxine Cuffe  05:52

The other thing that Bob talked about is, you know, he recommends to young people when they’re saving, from an early age to put the money into a 401k. He says to put it into the s&p 500 and leave it there. He’s a big believer in index investing. Do you think that that still holds today, given that we have this really high concentration in the index these Magnificent Seven stocks, and they’re so highly valued? And how does this align with the Haverford view of picking quality stocks?

 

Hank Smith  06:22

Indexing is certainly a viable approach for everyone, but I think today, and you bring up a very good point, today, investing in this broad s&p 500 Index is a lot riskier than it was, say 10 years ago, 20 years ago, because of the concentration of a handful of names. Two stocks, Apple and Microsoft make up 15% of a 500 stock portfolio, the s&p 500. So, if you are inclined to index, you probably should be looking at the equal weighted s&p 500 index as opposed to the traditional market cap weighted s&p 500 index. Having said that, I think Bob is correct, it is very, very important to get invested, and stay invested. Because time in the market is one of the most important ingredients to success. And our feeling is our investment philosophy helps improve the odds of staying invested for long periods of time, because we own such high quality companies and companies that are doing well and are financially strong. And that you recognize and you have a degree of, of comfort, owning these kinds of companies in the downturns, which inevitably, you get periodically.

 

Maxine Cuffe  07:53

We talked to Rebecca Moffett, the president of Vanguard charitable about donor advised funds, which many of our listeners might not be familiar with. These are vehicles that allow a very flexible and tax efficient approach to charitable giving without a huge administrative burden. And these accounts can really have a meaningful and lasting impact. I know this episode will be of interest to many of our clients that are looking to support nonprofits, with their philanthropy and really make a difference.

 

Hank Smith  08:18

Yeah, I didn’t realize just how big the donor advised funds that industry is Vanguard charitable, a national organization. Clearly one of the biggest, but not the biggest; Fidelity is is a bigger one. And then you have community foundations, as well. And, you know, I think, as it came through in that podcast, our country is an incredibly philanthropic country. And it isn’t just the big Ford Foundation, Rockefellers. Now, Bill Gates and Warren Buffett. The vast majority of the money is from the middle class, and giving to churches and community foundations and hospitals and what have you. So it is something that’s very prevalent throughout our entire society. And it’s quite unique because there are no other countries that give the way the US gives.

 

Maxine Cuffe  09:23

Yeah, I think that’s very true. I think the data really bears that out that the giving per capita is the highest in the United States compared to other countries. One of the other things that came out of that podcast was this issue of restricted versus unrestricted giving and Rebecca said that the trend is really moving back towards unrestricted. Now I know that many donors like to designate their philanthropy to specific purpose or to a certain program, but it’s really important to understand that this reduces the organization’s flexibility and especially when they have to react in a crisis. And as an example, you know, from from my own experience we saw during COVID how important flexibility was. I sit on the board for the Fund for Women and Girls in Chester County. And during COVID, we were under pressure from all sides, our fundraising events had to be cancelled because of social distancing. And our revenue was hurt. But the demand for services and for grants really spiked because people were losing their jobs, schools, daycares were closed. So many charities are really overwhelmed during that period. So having reserves that don’t have these specific restrictions on them, really gives organizations that flexibility, especially in a crisis when it’s most needed.

 

Hank Smith  10:35

Yeah, I was surprised at that shift toward more unrestricted giving. And sitting on a number of nonprofit boards, I can attest to the desirability to getting unrestricted gifts, even though no one’s going to turn down a restricted gift, as long as they’re not too many strings attached to it. It’s just fascinating how this country continues to give more and more each year. And even with inflation, people are factoring that in, in their added giving.

 

Maxine Cuffe  11:10

Then we had Eileen chambers in Episode Six. And I have to say a number of people have told me that it was their their favorite episode. She’s a beloved member of staff here at Haverford. She’s another person along with Hank, that’s been at the firm for 30-some years 33. And I loved hearing from Eileen, that the things that she really liked about Haverford on day one are the things that are still in place today. The fact that it’s just a company that has real ethics and caring, and the company really treats its employees well.

 

Hank Smith  11:42

She has worked at every level of this firm. She started right out of college and got to Haverford. And, and I, when she became a portfolio manager, she came into my office and said, I am so nervous, what do I do now? I said, What are you nervous about? And she said, Well, I, I don’t know enough. And I said, Eileen, here’s what you know that all of the more experienced portfolio managers don’t know, you know, the inner workings of every square inch of this office, you know, every single department, you know, how to get things done, go to the right people better than anyone else. And and so there’s your strength. And if you can’t answer a question, don’t worry about it. That’s what you have the research team to help you. And so I think that I don’t know if it reduced her stress, but I think it was, it was good advice. And and we are such a collaborative organization. You know, we have different departments. But we all work together, there are no silos. And that is demonstrated on a daily basis.

 

Maxine Cuffe  13:00

One of the questions that you asked Eileen about was, you know, how she deals with difficult markets. And you know, when she answered, that’s why it’s just so important to listen to your clients and understand what their worries are. But it all comes back to really how Haverford manages money. We’re investing based on long term fundamentals. You know, quality investing has been with us through all types of market environments, the ups and downs, whether it was .com era or COVID. But Eileen made a really important point that it’s really in a down market when you understand your risk tolerance. And COVID was a time actually that to you know, reevaluate your risk preferences and your asset allocation. Because if you couldn’t sleep at night, and you couldn’t stomach the volatility of the markets, then that’s maybe a sign that your current asset allocation was not right and really needed to be reviewed. The key for us is really having that, that appropriate asset allocation keeps you invested in the market.

 

Hank Smith  13:55

Yeah, you know, the we have an expression at Haverford that our former president Binney Wietlisbach used to drill consistently and that is worry about the things you’re in control of. You’re not in control of the stock market, you’re not in control of interest rates, you’re not in control of inflation, but you are in control of your attitude. You are in control of communicating with your clients. And Eileen does such a wonderful job of communicating and and proactively and returning calls immediately. And having lengthy conversations where she put it, she’s doing most of the listening, and, frankly, clients and high net worth clients particularly, they like to be heard, and she does a wonderful job of listening and then implementing and also providing guidance and advice as well. So, it’s a it’s a great message for for anyone in really any industry.

 

Maxine Cuffe  15:07

You also talked about the importance of separating your politics from investing. And I know that’s one of your your favorite sayings, Hank.

 

Hank Smith  15:15

it’s becoming increasingly more difficult to do. But it’s one of our rules of investing is don’t let politics get in the way of investing. And we saw this back when Barack Obama was first elected, a lot of people thought, Oh, my goodness, you know, the country’s going to go downhill. We saw eight years later when Donald Trump was elected, and a lot of prominent investors sold everything. And it just didn’t work out. And so you really need to separate politics.

 

Maxine Cuffe  15:56

then finally, in Episode Seven, you spoke with Jay Wright, the the former Villanova basketball coach, and it sounds like you really enjoyed speaking to him. What were your your key takeaways there?

 

Hank Smith  16:06

Well, first of all, he is genuinely a nice, down to earth person. And in the in, you know, being a basketball fan, the chance to podcast with a Hall of Famer, a two time national champion, was just really a highlight for me. But, you know, we we emphasize culture. And while he was head coach at Villanova culture was very, very important. And he said, Yes, it’s a given that we need to recruit a certain level of talent, and anything below that we’re not going to look at. But once we’ve identified that level of talent, then we have to recruit the players that are going to fit into the culture that we’ve established. And it’s so similar here at Haverford. We need experts, we need very bright people. But once we’ve identified those, then we have to put culture as the next most important criteria. Because we work together so well. And we have a certain ethos, a certain DNA. And it’s one of the reasons why we have had such a high level of employee retention at at Haverford averaging around 94%, which is really quite remarkable. One more interesting discussion we had with Jay, is how, when he joined, I believe it was 2001, the endowment at Villanova University was about $150 million. And when he retired some 20 years later, the endowment had grown to over $1.2 billion. And his success with the basketball program played a large role in that. And and he said, Yes, he was very, very proud of that. But it also was the effort of the President Peter Donohoe, that, that brought all these different departments together, whether it was academics and the professors or administration, athletics, and and instead of being separate fiefdoms, bring them together. And if we work together, we can success will follow and it certainly has with Villanova, their academics, they’re attracting much higher quality students, their business program, their nursing program are really top top level. And, and that happens through teamwork and collaboration. And again, I think it’s very similar to Haverford in that we work together as a as a as a team and not a bunch of individuals. Well, I did find out why JAY WRIGHT switched from wearing the best looking suits and ties to athleisure wear. Actually, that was a vote of the conference coaches. And one of the coaches said, I’ll tell you what, what’s JAY WRIGHT say? And at the time, it was the beginning of the pandemic pandemic and there weren’t any players in the in the stands and he said I vote for athleisureware that shocked all the coaches, because this tradition was wearing suits or coat and ties and, and he said, Hank, it was a ridiculous tradition. I’m running up and down the sidelines, sweating and then when we call a timeout, I have all these basketball players hovered over me dripping sweat on me. And so it certainly made sense. It’s probably saved him 1000s and1000s of dollars in his dry cleaning bill.

 

Maxine Cuffe  20:29

I thought it was fun listening to Bob Pisani talk about how proud he was of his room rater score. Do you remember during COVID people that were working from home, you could see you know, what their what their home look like. And somebody started rating people and he got a 10 out of 10 because he has all of those rock posters behind them. And it turns out, he’s a he’s a collector,

 

Hank Smith  20:50

right? I told him I told him my first reaction when I saw him broadcasting from from that room is wow, I didn’t know Bob Pisani was a stoner. He said, well think about our audience. Hank, you know, we’re a lot of it’s the baby boom generation and their beloved or former 60s stoners. So, yeah.

 

Maxine Cuffe  21:12

Well, we want to thank all of the listeners for your feedback this season. We have a five out of five rating for the podcast. We’re thrilled with that. So thank you so much. And for anyone who hasn’t left us a rating or review, we would love to see that.

 

Hank Smith  21:28

And just to tease for our next season that will be coming up this fall. We have Chuck Jaffe, host of Money Life, a veteran and financial journalist and nationally syndicated financial columnist, Ian Baker Finch, former PGA player, former Open champion and current current golf analyst for CBS, Dan Clifton, head of Washington DC policy analysis for Strategas Partners, Ed Boehne, Haverford’s own senior economic advisor and former head of the Philadelphia Federal Reserve Bank. And Sam Hankin, who has his own podcast called The Avid Reader Show. So we look forward to these interviews. And, again, please, any feedback is always welcome. Thank you, and stay bullish.

 

Maxine Cuffe  22:26

Thanks for listening to this episode of speaking of quality Wealth Management insights with Hank Smith. To hear future episodes of speaking of quality, please subscribe on Apple podcasts, Spotify, Google podcasts, or wherever you listen to podcasts. To learn more about the Haverford Trust Company, please visit www dot Haverford quality.com. This podcast is provided as general commentary and market overview and should not be relied upon as research, a forecast or investment advice. And it’s not a recommendation, offer or solicitation to buy or sell any securities or to adopt an investment strategy any opinions expressed are as of the date this podcast was recorded and may change at any time, and are the opinions of that commentator not have affords. Any opinions or information provided are believed by have preferred to be reliable at the time of this podcast recording, but are not necessarily all inclusive or guaranteed for accuracy. before making any financial decisions, please consult with an investment professional.