Ep493: Patrick Huey – Learn to Apply “Brief, Fly, Debrief” to Your Life

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Quick take

BIO: Patrick Huey is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Advisor in Philanthropy®, and an Accredited Tax Preparer.

STORY: Patrick bought a technology stock based on rumor and peer recommendation. He didn’t do any research and the stock ended up losing value.

LEARNING: Don’t just come into an investment seeking an investment, seek an outcome. Overestimate your risks and underestimate your gains.


“Overestimate your risks and underestimate your gains.”

Patrick Huey


Guest profile

Patrick Huey is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Advisor in Philanthropy®, and an Accredited Tax Preparer. He earned a bachelor’s degree in History from the University of Pittsburgh, and a Master’s in Business Administration from Arizona State University.

Patrick served nine years as a U.S. Naval Flight Officer earning the Strike Fighter Air Medal during combat operations and two Navy Achievement Medals.

He is the author of History Lessons for the Modern Investor and The Seven Pillars of (Investment) Wisdom.

Patrick specializes in creating financial plans, generating a retirement income stream, and managing investment strategies. Contact him for help growing, spending, and gifting your wealth.

Worst investment ever

When Patrick got a stable income, he started talking and listening to some of his friends about stocks. He figured they were a heck of a lot smarter than he was, so he listened pretty intently. Then Patrick bought a high-flying tech stock based on his friends’ advice. At the time, Patrick could only afford to buy one stock at a time and added to his portfolio when he could.

Patrick created a highly volatile, barely diversified technology/Internet stock portfolio. He did no research and bought the stocks on rumors and recommendations from a peer group. He thought nothing about risk mitigation or even his tolerance for loss.

Patrick was pretty sure at that point that he was an investment genius and would retire early on an island somewhere. Then the market started to slide, and he figured he was just going to add to the position. Then 911 happened, and Patrick got pretty busy. After 911, when he finally checked his account, his 10s of 1000s of dollars had turned into a few 100. He eventually sold that stock and just moved on.

Patrick got smarter about money and understood that you don’t amplify your mistakes by continuing to buy something that has no earnings, no business model, no profits, no nothing. And to also diversify his portfolio.

Lessons learned

  • Don’t just come into an investment seeking an investment. Come into an investment seeking an outcome.
  • Overestimate your risks and underestimate your gains.
  • Personal finances are just that; personal. So forget what your friends are doing.
  • Educate yourself about investing.

Andrew’s takeaways

  • Just following other people and not doing your research ends up in disaster.
  • We do not create wealth in the stock market. We grow wealth in the stock market.

Actionable advice

Understand how you think before you can think clearly. Keep emotions out of investing.

No. 1 goal for the next 12 months

Patrick’s goal for the next 12 months is to be a little bit better at something every single day.


Read full transcript

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives. Join the mission at my worst investment ever.com By taking the risk reduction quiz I created from the lessons I've learned from all my guests. It's time you start building wealth, the easy way by reducing risk fellow risk takers. This is your worst podcast host Andrew Stotz from a Stotz Academy, and I'm here with Pete featured guests. Patrick Huey. Patrick, are you ready to join our mission to help 1 million people reduce risk in their lives?

Patrick Huey 00:51
I'm ready, let's do this.

Andrew Stotz 00:53
Awesome. Let me introduce you to the audience. Patrick Huey is a certified financial planner, professional chartered advisor in philanthropy, and an accredited tax preparer. He earned a bachelor's degree in history from the University of Pittsburgh and a Master's of Business Administration, from Arizona State University. Patrick served nine years as a US Navy naval flight officer earning these Strike Fighter Air metal during combat operations in two Navy achievement medals. He is the author of history lessons for the modern investor and the seven pillars of investment wisdom, Patrick specializes in creating financial plans generating a retirement income stream and managing investment strategies. Contact him for help growing, spend growing spending and gifting your wealth you can always find him at Victory independent planning.com. Patrick, take a minute in Philly for their tidbits about your life.

Patrick Huey 01:53
Yeah, thanks, Andrew. That's a heck of an introduction. And I accept the challenge. I grew up in western Pennsylvania, and joined the Navy to fly airplanes and ended up seeing the seeing the world. As a young man, I went from there and was fortunate enough to find a job in wealth management immediately out of the military. And as we'll find as we go through this interview, that was fortunate because with that background, even though my dad was a banker, I knew next to nothing about money, and finances, and it helps me kind of guide my future to then be able to take the things I learned in the military and actually turned that into a career in a completely different sphere. And that is finance and helping clients to grow their wealth, to gift their wealth, and to save on taxes along the way. So I started my own firm in 2016. And I split time now between southern Florida and the Pacific Northwest. And like you, I think about risk every day when I wake up. I don't try to avoid it totally. But I do want to be aware of it and understand it and make sure that it's working for me as much as it can.

Andrew Stotz 03:17
Yeah, that's interesting story. In fact, we have some things in common one is that my family immigrated from America, from Germany to America in 1839. In the city they went to was Pittsburgh,

Patrick Huey 03:30
of course. Yeah, a lot. A lot of German immigrants in western Pennsylvania.

Andrew Stotz 03:34
Exactly. So, and then my great grandfather started an architectural firm in Pittsburgh. And then his son, my grandfather, and his two sons basically took over that business, which they ran for, you know, overall, it was a family business for 100 years, it's now been sold. And there's another group that's managing it, but they've built in had you know, we're architects on 900 different structures in Pittsburgh. So when I go to Pittsburgh, it's pretty amazing, you know, to see the archive of their work. Yeah, it's. So I grew up in Ohio, not very far away. So we did go to Pittsburgh quite often. And, yeah, Pittsburgh has a certain place in my heart, but I suspected Florida and the Pacific Northwest, probably, maybe better weather.

Patrick Huey 04:18
Ah, I guess it depends on the time of year does. You know, it's interesting, because I consider myself now kind of a citizen of the country. I've just moved around so much. Being in the military, and even afterwards, changing a couple jobs. You know, wherever I call home is wherever I hang up the hat. Right? So

Andrew Stotz 04:41
that's interesting, because when I live in Thailand, and when people ask me, you know, how often do you go home? And I say, every night? That's right. Last thing is it my grandfather wrote a book called early architecture of Western Pennsylvania. And oh wow. Available on I think I think there's all the old versions of it on Amazon. But basically, when the Great Depression happen, he didn't have any work. And he was working with his father and doing stuff. So he and his friends got together and said, Hey, let's just travel across western Pennsylvania and find all the buildings that were built prior to a certain date. Maybe it was, I don't know, 1880, or whatever that was. And they went and took photographs. And they went and drew them. And they went and talked to the owners, and they wrote this, you know, great book that just highlights all of these old structures. And so that was what he did during the Great Depression.

Patrick Huey 05:38
So I've got some, some German immigrant trivia for you, then if you're

Andrew Stotz 05:44
willing, I'm willing, I don't know how good I'm gonna do. But let's try.

Patrick Huey 05:47
I know that. You're probably familiar with Punxsutawney, Phil. So the idea behind Punxsutawney actually comes from the German immigrants, the German immigrants back when they were in the old country, they would go and they would look at the bears coming out of their dens and you know, there was all kinds of forecasting that went along with the bears. Well, when they got to the New World, the bears were either not around or were far too dangerous to go poking on the first weekend in February. So they adopted the groundhog as their new mascot, their new prognosticator. And that's actually storytelling in my book history lessons for the modern investor. So that's, that's my, that's my quick plug. It seemed to work there. So I figured out I would go down that road with you.

Andrew Stotz 06:38
That's cool. And it's funny how, you know, agricultural, agrarian based societies have all kinds of traditions in Thailand, we have the plowing ceremony, where they bring out the royal cows, and the direction that they go, as far as the eating of the different types of grasses will determine what they believe will be an abundant year or a drought year or whatever. So yeah, it's fascinating. Yeah, fascinating. Well, now it's time to share your worst investment ever. And since no one, no one goes into their worst investment thinking it will be. Tell us a bit about the circumstances leading up to then tell us your story.

Patrick Huey 07:16
Yeah, unfortunately, I think it's a pretty familiar story. I don't think I'm gonna knock anybody's socks off with the novelty of this. But, you know, I talked about joining the Navy, right out of college, I was a junior officer and got my commission in 1986. And by 1988, I was promoted to lieutenant junior grade. And man, I just felt like a real adult for the first time. I own a brand new Jeep, I paid my bills on time, and I had some money left over at the end of each month, really, for the first time in my life. So I started talking and listening to some of my friends about stocks, and it was the late 90s. So you can imagine what kind of stocks we're talking about, usually tech stuff. I thought they were really smart guy. They are really smart guys, to this day. But you know, Ivy League schools, and I figured they were a heck of a lot smarter than I was. So I listened fairly intently. So I started a Roth IRA for myself, which was really the only part of this I got right, in retrospect. And I bought a high flying tech stock name, I don't even I've been racking my brain, and I can't remember what it was.

Andrew Stotz 08:31
That's a good name. I'm attacking my brain. And I don't know what it was.

Patrick Huey 08:37
There was probably out there at that time. But I think I must have PTSD or I just wiped that from my brain because I cannot remember exactly what it was. But you could imagine it had.com In the name and probably no earnings. But it was positioned for that new economy, a new economy, that sort of thing. So I could only afford to buy one at a time. So that's what I did. I added to it when I could but basically, I created a highly volatile, barely diversified portfolio of technology slash Internet stock. I did no research, right. I bought on rumor and recommendation from a peer group. I thought nothing about risk, mitigate mitigation, or even what my tolerance for loss was. I watched obsessively as the account group. I checked the balance just about every day. I created a sport, right in my brain. It was now a sporting sporting event. And you know, I have a friend now who does market research, and we were talking this week, in fact about how much the NASDAQ went up during the last five or six months of the melt up in the late 90s. And it was like 60 or 70% 60 or 70% So I did pretty well, right? You know, this a couple $1,000 that I had and kept adding to was soon something that was not insignificant for a kid from Western Pennsylvania, right. And I was pretty sure at that point that I was an investment genius. And that, you know, I was gonna retire early on, on an island somewhere. And when the market started to slide, I figured, hey, I'm just gonna add to the position. You know, by s'mores, I can't make as much as I can at a discount. And those discounts kept getting more attractive as the share price slid. And then 911 happened, and I got pretty busy. After 911 When I finally came back to this account, I had through the magic of the stock market turned, you know, 10s of 1000s of dollars into a few 100. And last time I checked buying high and selling low is not good accumulation strategy for anybody's retirement, no matter if they want to live on an island or not. So that was it. I mean, like I said, all too common. I think I hear the story fairly often. But I did it man I lived it. And you know, I don't kick myself anymore for it, but sure would surely be nice to have so that money back?

Andrew Stotz 11:24
And did you end up selling it or some people hold on to it forever? Disappear? As I

Patrick Huey 11:31
recall, I finally sold that. And it just moved on. Getting smarter about money understood that, that you know, you don't you don't amplify your mistakes, by continuing to buy something that has no earnings, no business model, no profits, no nothing. And do so in an and diversified way.

Andrew Stotz 11:57
Yeah, so maybe we can review the lessons that you learned from that.

Patrick Huey 12:01
Yeah, you know, I think one of the reasons why I got into what I do now and why I'm fairly passionate about mastering the basics of finances, it is you know, I learned from that experience, but also I became very interested in cognitive biases. And why we make the errors that we do why I you know, did the things I did why I was ignorant and overconfident. You know, overconfidence, check, herd mentality, check, anchoring bias check. You know, I hit all I ticked all the ticked all the boxes there for for, for making a stupid decision. Right? So what do you learn, you learn to start with a plan, you know, don't just come into an investment, seeking an investment, come into an investment seeking an outcome, that's going to give you a much better guiding factor for things like risks. And, and I think one of the things I learned was overestimate your risks, underestimate your gains. And if you're still happy, then go ahead and proceed. But use that as a litmus test for risk. You know, forget, forget what your friends are doing. That's another good lesson. Yeah. A personal finances are just that personal. So, you know, even though your friends are the smartest people in the room, they may not actually know anything about investing, and even if they do, what they do may not be appropriate for you. And then finally, just edit, educate yourself. I came away from that very humbled. And I knew that if I was going to ever retire from anything, I was going to need to be better educated about how to properly invest and, and do those sorts of things. And obviously, I guess, not obvious at the time, but obviously, in retrospect, it turned out to be my mission in life to do that, so it was a big impact on me. And I know, you know, I know, it's one of those annoying job interview questions where you take your biggest challenge and turn it into your biggest strength. I feel like I'm doing that here. But it's true. I did really set me on a path to get educated and that education just kept spiraling out of control until it was what I do. Yeah.

Andrew Stotz 14:19
I mean, I think one of the things about this podcast it's so fun, it's the people that I meet through the podcast, like yourself, are people that have been through I mean, we've all been through troubles, but these are people that are willing to step through the troubles that they went through and explain it. That's not that common. Majority of people I asked to come on the show say No, thanks. My favorite reply is great idea. Not my style. Best rejection I got for this podcast.

Patrick Huey 14:47
I spend a lot of time talking about humans and humanity, right? Because, you know, we've evolved to this current state from somewhere. We're going to somewhere after it, who knows where. But the idea is you have to know yourself, you have to understand how your brain works. And if you're not willing to go back and look at, you know, critique the things that you did wrong. Well, you're just setting yourself up to keep doing those things. I mean, one of the things I learned flying airplanes, you know that the mantra was brief flag debrief. And in that debrief, we're gonna talk about everything you did well, and everything you didn't do well, because it's the only way you learn, it's the only way you get better. And that's, to me, that's the important thing as an investor to you know, you gotta debrief the failures. And I'm happy to do that on your show in front of the world.

Andrew Stotz 15:41
Yeah, it's a great brief fly debrief. Great advice. Maybe I'll share just two things that came away from in my head I was thinking about one of them is, you know, you talked about kind of following friends following the market. And what I wrote down was following occasionally works. But it's just occasionally and then most of the time in the financial markets, just following other people and not doing your own research ends up in disaster. But occasionally it works. And don't let that occasional time that it works, distract you to say, oh, you know, I don't need to do my research, or whatever that is,

Patrick Huey 16:20
like a lot of investing strategies, it works until it doesn't. And you got to be ready for the times when it doesn't. And you got to be able to shift and you got to be able to think your way through that. Without either panicking or becoming overconfident. I became overconfident, that's, that's kind of how I'm built. And I know that. So it's something that I got to take every day and make sure that I'm not becoming overconfident with other people's money, because that's a scary proposition.

Andrew Stotz 16:50
And the second thing is, I wrote a book a long time ago called How to start building your wealth investing in the stock market. But that wasn't the original name, I actually published it initially under the title, you won't get rich in the stock market, until you change the way you think about it. I like that name much more. But many people said all you got to be more positive. So anyways, but in that book, that now renamed how to start building your wealth investing in the stock market, right, I talk about the concept of, and you're gonna hear it at the end of the podcast, create, grow and protect wealth, what I always say is that we do not create wealth in the stock market, we grow wealth in the stock market. And most of the time when people go into the stock market, they think that they're coming in to create wealth, as you probably felt, as I start was going up that 60%, or whatever, like, I am really creating wealth. But once you change your mindset from that to saying, I'm going to grow my wealth, now you can get rich, because you're thinking very long term. And if you're thinking very long term, that's really the the only way that you can kind of almost guarantee if you just take an index fund, and you put it in your, you know, five year old, you know, kids, you set up an account for your five year old, you put in an index fund with $50,000 $100,000, whatever. And 3040 years later, you open that up, assuming that the index fund didn't go bust. And but it would even if it went bust, or something happened to it, it would have been switched into another index fund with another company taking it over. And it gets the end of the 40 years, and it's gonna be millions and millions of dollars. So remember, you know, from my perspective, for the listeners out there that you create wealth, there's two main ways that I think about creating wealth. One is you can start a business. But that's not a great way to create wealth, because majority of people are not entrepreneurs. So it can end in disaster. So the other way that you can create wealth is that every month you get a salary, let's say it's $10,000. If you can spend 6000, you have created wealth of 4000. And you now have an ATM machine, you have a cash machine. What are you going to do with that cash? And that is Yeah, versus grow?

Patrick Huey 19:00
I think that's a really good point. And there's some debate on whether or not he actually said this, but we're gonna just assume that he did. But I believe it was Einstein who allegedly called compounding the greatest force in the universe. And he even if he didn't say it, it's, it's still correct, right? Because that's how you grow, or that's how you create wealth is you have money and then you get your money to work for you in some capacity that's intelligent and thought out and planned for. And you use the stock market potentially as a tool along the way, but I think that's exactly right. You don't you don't create it that way. You supplement it that way. You grow it that way. But your wealth is a much bigger topic than just the stock market.

Andrew Stotz 20:00
So based upon what you learned from this story and what you continue to learn what what action would you recommend our listeners take to avoid suffering the same fate?

Patrick Huey 20:12
I think you need to get a divorce from your brain, at least for a short period of time, right? Understand your brain is just not your friend. When it comes to investing. Many of the things we talked about humanity, many of the things that make us human, our desire for socialization, our biases, and how we process information, our reactions to threats. Those things make us lousy investors. And you have to understand how you think before you can think clearly.

Andrew Stotz 20:47
And I presume that part of what you're talking about in your books? Yeah. What would be the best book for someone listening to this that thinks that resonates with this? What would be the one that you would team to go to?

Patrick Huey 20:59
Yeah, history lessons for the modern investor, where we, you know, talk about things like compounding. And we talk about things like diversification, and we talk specifically about some of the mental biases that you can engage in, like anchoring bias, you know, I wouldn't sell that stock, because I still believed it was worth what I paid for it. Well, I don't get to decide that that's anchoring bias. So yeah, I think that would be the best book. The other one is more for people who are looking to potentially hire somebody to help them with their finances, or have a guidebook on what questions to ask their

Andrew Stotz 21:38
got it. And we'll have links to that in the show notes. So ladies and gentlemen, if you want to check them out. Now, what is one resource that you've created? Or have used that could benefit our listeners? We've mentioned the books, is there anything else?

Patrick Huey 21:52
Yeah, there is a website for history lessons, which is kind of fun. There's a blog, that I will admit, I'm not as active on as I used to be. But there are also a couple videos that I shot that are kind of fun, looks at history, and how we can take some lessons away from those and how to manage risk or how to plan properly for our futures. So yeah, I would direct folks there for kind of a fun look, if they want to get to see how my mind works. Which website? That's history lessons for the modern investor.com.

Andrew Stotz 22:30
Perfect. Okay. And we'll have links to that in the show notes. And All right. Last question. What's your number one goal for the next 12 months.

Patrick Huey 22:40
My number one goal for the next 12 months is the same goal. It always is. I want to be a little bit better at something every single day. Whether that's a better husband and father, better tennis player, better investor, better educator, a better author, any of those works, just want to be a little bit better at something every single day.

Andrew Stotz 23:03
Nice. Well, listeners, there you have it another story of loss to keep you winning, join our mission, and start building wealth. The easy way, by reducing risk start by going to my worst investment ever.com And take the risk reduction quiz. As we conclude, Patrick, 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?

Patrick Huey 23:37
Ah, you know, that warms my heart because the part I didn't tell in my story is that I left a master's degree in teaching to go into investments to get my master's in business. So there's still a little bit of a teacher in me and I certainly appreciate and I accept with a warm heart.

Andrew Stotz 24:00
Beautiful. And that's a wrap on another great story to help us create, grow and protect our wealth remembers ladies and gentlemen. This podcast is about one guest. One story. One mission to help 1 million people reduce risk in their lives fellow risk takers. This is your worst podcast host Andrew Stotz saying. I'll see you on the upside.


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About the show & host, Andrew Stotz

Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.

Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.

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