Ep276: Jim Rembach – Some Risks Just Can’t Be Avoided

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Guest profile

Jim Rembach is a Customer Experience Authority and President of Influence to Action, which operates several entities, including CX Global Media, Call Center Coach Virtual Leadership Academy, Contact Center Virtual Summit, and Customer Service Weekly. He’s the host of the Fast Leader Show, B2B Digital Marketer, and Customer Service Weekly podcasts.

Jim is a Certified Emotional Intelligence practitioner, Community Specialist, Employee Retention Specialist, and Digital Marketer. His work as a digital business development expert enables organizations to deliver on the needs of the new digital business development imperative.

 

“Do it again even after losing because there are opportunities existing out there, and you’ve got to make those moves.”

Jim Rembach

 

Worst investment ever

Time for some risk

Jim had some money that he was willing to risk in a new investment, so he started looking around for risk opportunities.

Finding the right fit

Jim picked about five different companies to look at. He did his research and ensured that he had marked off all the checkboxes. Then he decided on a female apparel company that seemed promising. Even though the company had some short term debt issues, it got refinanced for favorable rates.

Staying down under

Jim had hoped that the company would pick up, and the stock starts performing well. However, they went down further.

Jim stayed hopeful. He did more research, and all indications showed that the company would pick up. Jim decided to double his investment in the company.

The unavoidable loss

Roughly four or five months after he doubled down, the company declared bankruptcy, and just like that, Jim lost his entire investment.

Lessons learned

Keep taking risks

Continue taking risks even when you lose. Don’t have your emotions tied so profoundly in the loss and make it stop you from trying again.

Do your due diligence

Do your due diligence and research, look at fundamental elements before you make a move.

Andrew’s takeaways

Play with money that you can lose

Invest money that you can afford to lose to avoid losing all your wealth.

Be aware of event risk

Event risk happens very suddenly. It could be bankruptcy, a corporate governance event where the owner did something benefiting themselves and harming others. With event risk, when it is announced, either trading stops immediately, or the stock price falls 30%, and you can’t execute that stop loss.

Apply rules of risk management

Risk assessment is critical when getting into investment. Size your position and go into a position slowly.

Actionable advice

Have an active pool of funds that you’re looking at doing some speculating with. Also, learn how to become better at your research from a human perspective.

No. 1 goal for the next 12 months

Jim’s number one goal for the next 12 months is to look at the permanent shifts that people think are temporary and make some investments because he believes wealth is made in downturns, not upswings.

Parting words

 

“Move forward. Even if you end up taking two steps back from one step forward, it’s just temporary.”

Jim Rembach

 

Read full transcript

Andrew Stotz 00:04
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community we know that winning investing you must take risk but to win big, you've got to reduce it. This episode is sponsored by a Stotz Academy which offers online courses that help investors, inspiring professionals, business leaders and even beginners to improve the finances of their lives and their businesses. Go to my worst investment ever.com now to claim your discount on the course that excites you the most fellow risk takers This is your worst podcast hose. Andrew Stotz, and I'm here with featured guest, Jim rambox. Jim, are you ready to rock?

Jim Rembach 00:46
I am ready to rock and I might even roll once or twice who knows.

Andrew Stotz 00:51
We're gonna have some fun. All right, let me tell the audience about you, Jim. Jim rombach is a customer experience authority and president of influence to action, which operates several entities including cx global media, call center coach virtual Leadership Academy, contact center virtual summit, and the customer service weekly. He's the host of the fast leader show b2b digital marketer, and customer service weekly podcasts. Jim is a certified emotional intelligence practitioner, community specialists, employee retention specialists, and digital marketer. His work as a digital business development expert enables organizations to deliver on the needs of the new digital business development imperative. Jim, take a moment in Philly further tidbits about your life.

Jim Rembach 01:38
Oh, well, one tidbit is I actually went to university and double majored in finance and real estate. But when I graduated, it was right in the middle of a recession of 1991. And there was no investment banking jobs for, you know, a newly graduate white guy that just, you know, there was no no job opportunities there. So I had to go another direction. But I've always been interested in investing. For me, I had a background while I was even going to school, in retail. So I followed that path for a long time and ultimately found myself in customer service and customer care environments and worked my way up in the management ladder. And, and I've been in that industry, basically, my entire career. And in me, you know, I have always had that desire to want to complete, you know, my initial mission, you know, to be an investment banker, however, I've had to do it on my own personal time. And here's the thing, too. When I start thinking about doing that, I have to be very careful in regards to taking risks, you talk about safe risks, and you talk about getting older, my wife is actually a tax CPA. So that talking about that dynamic in the house can be quite interesting. Because I'm a finance guy that understands risk reward, she doesn't want that, right. Matter of fact, we went and took an exam once talking about what, how risky, are you? Huh? little quiz by the managing our portfolio at the time. And he came back after we completed our quiz. And he looked at my wife, and he says, You're more risky than he is. And she says like, there's no way this is impossible. He's the one who's the risk taker she was there's no way I'm more risky than he is. And he looked at her and said, Oh, yes, you are, he goes, because when an opportunity is right in front of you, you won't take it.

Andrew Stotz 03:34
And you said sat back and enjoyed that moment where it highlights something that I teach about in one of my courses, which is called How to start building your wealth investing in the stock market. And that is, most people don't talk about the biggest risk, which is shortfall risk. Many people say I keep my money in the bank, because I'm low risk, and I don't want to, you know, risk it. But what's happening there is your money's not growing, and therefore you're exposing yourself to the fact that when you become 60, or 70, and you want to retire, the money is just didn't grow enough.

Jim Rembach 04:07
That's exactly right. Hmm.

Andrew Stotz 04:08
Yeah. You know, one of the other things I kind of want to understand more about what you do, because, you know, it's interesting, because when I was in university, I people asked me, Why did I study Finance? I said, Well, you know, I looked at marketing, and I thought, you can learn that from a book. I looked at, you know, human resource as you can learn from a book. And I thought accounting i thought was kind of boring, you know, very fixed, and finance that, you know, became the one that I took. But what I've learned as I've gotten older, is marketing is much harder. Customer Service, you know, like that. That's like the real differentiator. That's so hard. I mean, anybody can calculate formulas and do all that stuff in the world of finance, but that whole thing and i think you know why I was interested also in getting you on the show. Just tell us a little bit about your experience in that area and kind of what have you learned over the years that you've been involved?

Jim Rembach 05:07
So, you're, you're exactly right, because the complexity comes from dealing with human beings.

Jim Rembach 05:14
That's really what it's all about. And when you start getting into the whole globalization of, you know, the marketplace in the economy, and whichever way you want to look at it, that complexity is magnified, you know, x times. And while we are human beings from a creature perspective, and there's some predictability to that, you know, there's variances that are going to cause things to go sideways really darn quickly. That's why a lot of times when we look at investments, we're thinking, Oh, you know, hey, that's going to be good for this particular market sector. And then it goes the other direction, you're like, how is that possible? Right. And so I think that's one reason why they say, you can't predict the market. Right? And it really, from the human part, that's the part that makes it so unpredictable.

Andrew Stotz 06:00
Okay. I think that that's the point is the human aspect, whether it's marketing, whether it's investing, the human aspect is too challenging. And I just wanted to ask about something else in your bio that I find fascinating is the emotional intelligence, the certified emotional intelligence practitioner, can you just tell us a little bit about that, because I mean, the value of emotional intelligence these days is so critical.

Jim Rembach 06:24
So for me getting into customer service, and being in that world and leading of people, you have to be really good. In regards to your emotional intelligence skills. It's a requirement. And now it's become vital more than ever, when you start talking about remote workforces, when you, you know, start talking about the shrinking, you know, of organizational hierarchies. And so you have a lot of people who are on the periphery who are responsible for big chunks of the business. And it's, again, it's the human element, that's the differentiating factor. And I would became certified but through an organization out of Canada called MHS. And a reason I chose to go down the path to be certified through MHS is because they have the largest database on emotional intelligence in the world, they've been doing it the longest, and they have the most in depth understanding of it. And there's a whole lot of analytics around it. And they talk about 54 competencies that's associated with emotional intelligence. One that we hear a lot of for examples, empathy, empathy, empathy, empathy. Well, that's only 154. Right? While it is an important one, and it's a vital one, when you start talking about customer experience, and customer care, and, you know, really understanding even market, you know, market movements, you know, because you're trying to understand why people do the things they do, why they buy the things they do, why he are attracted to particular brands, why they're attracted to particular sectors, while all these things that come into play?

07:52
I think I think we're getting

Jim Rembach 07:54
quite frankly, it's made me a little bit better, you know, investor, you know, talking about going through this whole forest COVID thing, you know, like, what's, what could possibly be impacted that people don't readily see? Right? And you really have to get down to the people element to say, Okay, what are they thinking? What are they feeling? What are they seeing? What do they see as their threats? What do they see as their opportunities and really break it down? In that way, I do something that is called retrospective engineering. And a lot of ways I use it in my marketing a lot. When you start talking about retro retrospective engineering, it's like, Okay, what is the ultimate action that we want to have happen? Okay. And then what you do is you start working backwards from there, in order to be able to say, okay, for this to happen, this is the path that needs to it's a big puzzle. And that's one of the reasons why I love I love, you know, dealing with human beings. It's one big, massive

08:57
puzzle.

Jim Rembach 08:59
Engineering is so powerful. And even today, I was talking to someone who is a potential client. And I asked him this question. I said, so tell me why people buy from you. And he started telling me all the benefits of their solution. I said that, okay. I said, that's great. I needed that information. But that's after they've already used your product. I'm talking about the time at which they just signed the contract and use your product yet, they have seen no value. Why did they decide to buy it at that point? You're looking at it like that, like that's an opportunity.

Andrew Stotz 09:33
And that's the whole key to marketing is getting people to see that value before they experienced that value. I was just working with a group of interns who have been taking one of my courses, and we're working on how do we improve the marketing message? And they were saying, you know, it's clear in the course you know, that you're passionate that you're ethical in the way you look at how you make how to make money in the stock market investing, you know, But I said, well, that that's in the courts that's in the courts when they understand what we how do we communicate that out to the world? And so yeah, it's a, it's fascinating. You know, the other thing I tell the listeners out there, I know that you are very mature in your emotional intelligence, because I've given you some tremendous obstacles to deal with in just getting on this show. Because on our first time, I had my computer crashed, and I had to postpone and then this time, I just got caught up in something, and I got late to the meeting, and you have been a trooper, so I appreciate that very much. All right, well, let's get into it. Now it's time to share your worst investment ever. And since no one ever goes into their worst investment, thinking it will be. Tell us a bit about the circumstances leading up to it, and then tell us your story.

Jim Rembach 10:50
I would dare to say,

10:53
I was

Jim Rembach 10:54
afraid it's important to say that I was willing to lose. Okay, that was an important point. This wasn't a situation where I was investing in something where it was a core piece of my investment portfolio, I'm like, Okay, I've got to preserve this, right. So I didn't worry about it, it was like, Okay, let's take some risk, right. And I started looking for those risk opportunities. And I came across a particular organization that was in something that I'm familiar with retail, and started doing some research on them, because they started getting some negative press I, I looked for I did some research or initial research on organizations that had the most significant drop in 52 weeks, okay, I used that as my, my Nuggets to be able to find opportunities in because as we all know, you know, those that have a big drop, some of them will have a big, you know, V or rebound effect, you know, if certain things are correct, and in the right position. So, I picked about five different companies to, to look at. And this one that I finally decided on, by all indications, they were making some of the right moves, they had some short term debt issues that they were able to get refinanced for favorable rates, they started pulling in some people that had very extensive backgrounds in in the the retail space, specifically they did female, young female apparel, so they were targeting, you know, that 18 to 30 year old, young female crowd. And, and I'm like, okay, looking at the past experiences of those people that came in and the brands that they were coming from, and the sexist successes that they were having, I'm like, you have to assume that those people would not make a decision to jump on a ship that had a bunch of holes in it. Right? You I mean, you hit you have to start looking at their

Jim Rembach 12:50
Yeah, you have to start looking at their their pedigree in their experiences and saying, okay, they have to have competence in this brand. So maybe I will, you know, take on that competence myself and make an investment in, in this particular company. So I did, so I did, and, like many things that happen in the market, well, they went down even further. So I'm like, Okay, what do I do with this? Do I just sit tight? And and let happen? What will happen? Or do I double down? Well, I double down. I'm like, Okay, if this if I'm going to do this, you know, I don't I don't want to just dip my toe in the water. I'm like, I did the research, they're making some moves. These indicators are looking pretty positive. Let's go ahead and make the jump.

Andrew Stotz 13:38
Did you discuss it with your wife? Oh,

Jim Rembach 13:41
I, um, I did. I mean, I did, because I already also had told her and we had kind of made the decision that, you know, this is, you know, some money that we can play with and take some risks with, right? Again, it was educated risk. I didn't, you know, throw it out on the wall, and it happened to land on this company's name. That's not the way it worked. I started looking at all of these particular comments and things started seeing to aligning, and, again, going back to that human factor, right. So that, you know, I looked at the people who were getting on board and hopefully turning this thing in the right direction. And I'm like, you know, they replaced some seat, you know, senior level people, I'm like, Okay, looks like things may be moving Well, for this organization.

Andrew Stotz 14:19
And, you know, I'd also highlight that, you know, the whole purpose of investing kind of fundamental, long term investing is to do exactly what you're describing, which is to try to identify the opportunity before everybody else sees it. And so when things start to fall, if you feel like your story's still there, then that is the time you should be putting in more. So you know, at in hindsight, we see things differently. But you know, at that time, I think it made a lot of sense. So keep going.

Jim Rembach 14:53
Yeah, it absolutely did. And so, essentially what occurred after I doubled down It was roughly about a four or five month period. And then they filed for bankruptcy like, oh, man, that was a crushing blow. So I think what happened is, you know, some of their short term debt financing fell through things in turn around fast enough for those particular investors. And at the time looking at this particular company, the economy was actually you know, picking up I mean, and so then you look at this group, you're like, Okay, if the economy is picking up, why are they having issues? And essentially, I think they just had their funding pulled, and there's no way they could survive it.

Andrew Stotz 15:33
And when they announced for bankruptcy, has it start? was a SharePoint still falling? Was it allowed to trade? Or once they announced it didn't trade anymore? Did it absolutely collapse?

Jim Rembach 15:45
It was, it was pretty darn quick. And so as far as the actual sequencing, um, you know, I think it was a scenario where their trading at all had stopped, you know, and then within like, a day or two, all of that hit? Yes,

16:00
it was gone.

Andrew Stotz 16:03
So, tell us, what did you learn from this? Um,

Jim Rembach 16:09
but the only thing that I can say, like you said, I mean, the due diligence, was there. Yeah. I reported on the information that was in place, I researched the people who were involved. I mean, it was one of those scenarios that, what could I have done differently about the only thing I could have done differently is maybe took a step back and said, well, when you look at retail, you know, where's their e commerce scenario? They had an e commerce arm. I mean, they had some e commerce. I, but it wasn't robust. And so you know, maybe, you know, maybe reflecting back, I would have put more weight on that. But again, that's hindsight. Because who knows? I mean, back when happened. We didn't have the internet the way that we have it now. And ECAM the way that we have it now. I mean,

Andrew Stotz 16:58
this was, to that extent, you know, back in those days,

Jim Rembach 17:03
yeah, this is this. I would dare to say this is probably about 12 years ago.

Andrew Stotz 17:11
Okay, any other lessons?

Jim Rembach 17:15
I mean, for me, it's the lesson was continue to take the risk, be honest with you, you lose? I mean, don't you know, don't have your emotions tied so deeply in the loss? It is looking at it and saying, Oh, well, you know, I did all the right things. No, that should not stop me from doing it again. do your due diligence, do all the research, you know, no, look at, you know, look at some of the fundamental elements and, and make a move.

Andrew Stotz 17:49
Um, so maybe I'll summarize some of the takeaways that I got from this, I think it's a great story. I mean, the first thing is, you know, play with money that you can lose. So it's an important lesson in investing. And, you know, a lot of people, you know, they play with money, they really can't afford to lose. And then that brings in a whole nother emotional element of depression and fear, and all that it's already hard enough. But you know, when that comes in, it's even harder. Now, the other thing is that what you experience is what we would call in the world of finance, event risk, and event happen. In this case, it was bankruptcy, but it could have been a corporate governance event where the owner did something benefiting themselves and harming others. And we see event rates, I mean, I look at stocks across Asia, thousands of stocks across Asia. And event risks happen where corporate governance or something like that happens now, generally, I use a stop loss, even as a fundamental person to say if it falls by certain percent, even though I may like the story whenever I'm just going to get out because I can't figure out what's going on. But the problem with the event risk is that events are announced, just like that. And then the stock price, either trading stops immediately, or the stock price falls 30%. Boom, and they can't execute that stop loss. And, and there's not a lot of ways around them. And you could say, well, I do a lot of corporate governance, you know, research, but you know, come on, how much can you do really as, as an investor, it's not easy to do now. So event risk is something that we have to watch out for, and except that it's going to come throughout your career. Another event that happens is that people make mistakes in their actual orders that they place with a broker. And they make mistakes when they thought they were going to sell but they didn't. And then they later find out that Oh, I forgot to and so it's not only company event risk, but we make mistakes. And so you have to prepare for that as an investor. I think to know that that's coming. I think I really like your response, which is the idea I do it again and you know, you got to keep doing it. And the second, the third part that was interesting was about, you know, diversification. Now on one hand, you could say, well, you just bought one stock, you should have bought a portfolio of 10. But the reality is, you also said that you this is a small amount of your overall wealth, and that you had a decided that you could gamble with this, you could take risks with this. So in that sense, you did diversify. And so it's not as easy or black and white to say, well, you should own more stocks, the only last thing that I would say that possibly could have helped is the idea of risk management and the idea of sizing the position and, and going into a position slowly, sometimes, one way to deal with this type of a situation is that when you find that idea that you really like, just buy a little bit of it, buy 500 bucks of it, just to get it done. Now you own it, boom, okay, so you're not going to be feeling like you got to rush into something, you're now in it. And then you look at your next move, based upon taking some of that out of it. So those are some of the things that I thought about anything you'd add.

Jim Rembach 21:10
I think you hit on really good points. And when you think about your expertise, I mean, you're looking at it in a, you know, I guess I guess you'd say a more holistic manner than even I would have, you know, I don't have the extensive background and experience that you have. I mean, so So for me, I think, you know, the, like I said, the most important thing is to say, you know, do it again, because there are opportunities that are existing out there. And you've got to make those moves. I mean, I actually fired some guy who was managing our portfolio, because in a span of, say, 30 months, he did one trade. One, and I'm like, What are you doing? I mean, and this is, and this was at the time When, when, you know, Google was ahead, come on board and was just taking off like crazy now, and all, you know, is right at that, right, you know, that pre tech, you know, crashed scenario. And all these moves were happening. I'm like, What are you doing? I mean, so you've got to be constantly moving and living. That's why it's so hard for an individual investor, I mean, you don't have access to some of the insights and information that the pros have access to, you know, that that's one issue, the total they have access to, and you have to be really careful. So for me, what I have now is I have somebody managing, you know, a big chunk of my portfolio to do those types of things. And then I still like to dabble, I can't let it go.

Andrew Stotz 22:43
Yeah, yeah. As I I'll wrap up this section by saying what mom says, and I think probably all of our mothers and fathers say is, you win some and you lose some that's like to get back in there. So based upon what you learn from this story, and what you continue to learn what what action would you recommend our listeners take to avoid suffering the same fate?

Jim Rembach 23:07
from suffering the same fate? I think I think the one that you said is a possibility. Which is, you know, do a little bit of dabbling. Right. You know, so in other words, invest that, you know, $500, or, you know, whatever the case may be for you that works, you know, and see what happens. I mean, that is one option. And the other part is I said, I would think, you know, have an active pool of funds that you're looking and doing some speculating with and learn how to become better at your research from a human perspective.

Andrew Stotz 23:45
Beautiful, beautiful. Yeah. I mean, that is such a tough question for your story. For most people's story, that question I think is a really kind of easy one, like, don't do this, or make sure you get a contract, you know, or something. But in your case, you know, I would say you did your research, you know, you did almost everything right, but, you know, stuff happens as they say. Okay, last question, what's your number one goal for the next 12 months?

Jim Rembach 24:15
My number one goal for the next 12 months is to take and look at all of these permanent shifts that people think are temporary. And make some investments. Because we all know what happens is what, you know, when things fall, whatever they may be, whatever. I mean, it doesn't matter if we're talking about markets, it doesn't matter what we're talking about, when things fall, there are people who will rise and thrive. Okay, and how do they do that? Right. They eliminate a lot of those fear, you know, components and elements that we all have within us. Some are self limiting beliefs. Some of them are past experiences, like I could easily say for my gosh, I did everything I was supposed to. I'm not doing that again. Right? I could easily do that. And many of us, that's what happens. And we restrict ourselves and we start thinking about that because that's the Well, we're drawing water from I got Bert once I'm not getting burdock birth again, that we know that wealth, wealth is actually made in downturns, not up upticks.

Andrew Stotz 25:32
Man, that's an inspiration, I think for all of us. I know, one of the things that I did in my life, when the corona crisis started happening was, I knew that my process of selling b2b was going to slow down. And therefore I shifted my focus to my online courses and creating them and making them better and getting them out to individuals who I knew there are plenty of individuals out there that are looking to learn new things during this time. And so it was during if this downturn hadn't happened, I wouldn't end up with what I think now are pretty awesome packages of Great Courses. So I think for the listeners out there, you know, I think Jim gives us a good challenge, to think about how can we take advantage of this opportunity to make sure that we come out, and we thrive from him. So it's a great reminder. So all right, listeners, there you have it another story of laws to keep you winning. To find more stories like this, remember, you can go to my worst investment ever.com. And also remember to go there to claim your discount on the course that excites you the most. As we conclude, Jim, I want to thank you again for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Jim Rembach 27:04
Move forward. That's what I can say. Even if you end up taking two steps back from one step forward. It's just temporary.

Andrew Stotz 27:15
Ladies and gentlemen, there's the challenge for the day move forward. Well, that's a wrap on another great story to help us create, grow and most importantly, protect our well fellow risk takers. This is your worst podcast host Andrew Stotz, and I'm here to tell you, I'll see you on the upside.

 

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Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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