Freddy explains Left Brain's Value Statement and Approach

Welcome to Left Brain Thinking, where creative investment ideas meet logical analysis. That's the hallmark of Left Brain Investment Research, where the analysts are looking for growth companies with the potential to double in 2 to 3 years and high-yield bonds with the potential for dramatic price appreciation. And today we're talking about the underpinnings of Left Brain Thinking, the values of the firm, and we're doing that with Freddy Garcia. Vice President for Investments at Left Brain Wealth Management. Learn more about him and the firm at leftbrainir.com and find out about the latest installment of Left Brain's series of Fortune Makers Zoom events focused on wealth builders, which are small and mid-cap stocks with the potential to grow into major players in their industries. That's scheduled for April 8th. Freddy Garcia, it's great to chat with you again.

Well, Chuck, I'm glad to be back.

We're always talking about how Left Brain are growth investors. So I don't want people to confuse the firm's value statement with the value investing style. But Left Brain Investment Research and Left Brain Wealth Management has a value statement that's kind of the backbone of your investment process. So talk about how this is bedrock for what you guys do.

Chuck, thank you. Yeah, I wanted to come on and talk about more of who we are and why we do what we do. My colleagues and I have come on and do the show, and you You know, we highlight stocks that we like, and there is a reason behind this, and I wanted listeners to get a better understanding of what drives us and what's important to us. And many times people don't know who's behind these recommendations. So first off, who is Left Brain? Other than somebody who recommends and looks for stocks that has a chance to double in 2 to 3 years, you know, we are actually patient, disciplined, and long-term investors. Left Brain as a whole is actually a SEC-registered investment advisory firm. And what that means is that we have a high-level responsibility to the clients. An RIA firm maintains a fiduciary duty to operate in the best interest of clients. And our firm, other than just being an RIA, we serve 3 market segments. You know, we have the RIA side. That's where I work with individuals and manage their money on a discretionary basis. That's our RIA side. Then we have our capital market side that manages our capital appreciation fund and any other potential funds that we come out with. And then, of course, there's our investment research side, and that's the driver behind all this. That provides all the research reports for our subscribers and also the investment choices that we use for both the RA and capital markets. And then behind left brain are the team members. Our staff— I was just doing the math on that— we have a combined about 100 years of experience in this industry, and many of us have designations with accreditations from MBAs to CFPs. So we definitely are experts and leaders in our field. And have a lot of experience doing it. So that's what makes up Left Brain, and that's who we are. As far as what we do, besides being patient long-term investors, this means that we're going to apply rigorous analysis in determining the securities that we create our reports on. We definitely take time in what we do, but it's also very methodical. You know, it's a disciplined selection process, and we monitor a huge amount of different securities throughout the investment universe, but we only select a few that make our requirements, and that smaller amount goes into our chosen list. And you've heard some of those ideas from my colleagues that have come on the show before. But that chosen list is what we call, you know, that's our top ideas reports. So for anyone that's looking for powerful ideas and well-researched viewpoints, that's what we help in. You know, we're very company-specific with our research. It's very unique. It's independent. And the result is a very disciplined investment process. We utilize quantitative, technical, and then detailed fundamental analysis to create security-specific reports. And it provides that steady flow of top ideas and helps create that new source of alpha for potential investors, for potential subscribers, and again, to our existing clients.

As somebody who's written two books on choosing and working with financial advisors, I know that I could replay that answer for a lot of folks that go, yeah, I'd like an advisor like that. But I know that what we're talking about here is something of a specialized advisory firm that while everybody was just, oh, I want details and I want this and I want that. The truth is not everybody wants somebody who's going to tighten down and go that much more granular with their recommendations and get down into individual stocks. Plenty of people are going to be just fine with buy me a couple of mutual funds and make sure that my portfolio is roughly 60/40 and let's go from there. So who's the right person? I mean, you talk about what you do. Who are you doing it for?

You're right. Most of the industry, again, they're very comfortable. Many people are comfortable with just platforms that are created for them, different models, the 60/40 approach. And I did that for a long time in my career. Until I made that change and realized that, you know, there's more focus that should be placed on the actual individual investments of people. And that's what we specialize, is working with high net worth families that are seeking discretionary wealth management, other than just that cookie cutter approach of putting together a portfolio for them, actually creating individual securities that make up their investment selection. So we can tell them what's behind their investments, what does it actually create, what should we eliminate, what should we increase exposure to. On top of working with high net worth families, we also work with investment advisors looking to do the exact same thing that I'm doing, and that's add value to their wealth management platform. You know, as an advisor, if I went to any kind of function, when they found out what I did, they'd be like, "Oh, what stocks do you like?" And I'd always kind of give, "Well, you know, it's more about the portfolio. It depends on your risk," rather than be able to give them a straight answer. You have those same issues with clients. So we work with advisors so they can actually give specifics, just like the recommendations that we've come out on the show, where they can get specific recommendations on a stock, why we like it, and why they should own it. They should be able to have those conversations with clients exactly like the same way I do. It's also going to help give that value-add to differentiate themselves like you mentioned. Yes, there's thousands of advisors out there, but how do you separate yourself? By looking at those individual investments. They can also increase their clients' AUM by the potential of outperforming market indexes. So rather than constantly trying to get new clients, they can focus on their existing AUM. And the last area that we help and who we do this for is for portfolio managers. Many portfolio managers are looking for independent research and the potential to add alpha to their existing portfolios. That's where our research can help. And that's who we do this for.

Sometimes you're hiring a financial planner to run your money. Sometimes you're hiring your financial planner to find the people to do the actual money management. They're going to oversee the process, but they're going to be looking to somebody like a left brain to do a lot of the actual security selection. Ultimately, the right client is always going to be one that not only wants to work with you, but that you want to work with. So who is that? I mean, how does somebody benefit working with a left brain, a firm that really digs down and gets more into the weeds on individual security selection and portfolio management, as opposed to that guy who's maybe more at the 30,000-foot level on investments?

Many advisors, they look at a whole portfolio and they try to basically fit it into a customer. Where we actually look at the investments, we lead with investments and then figure out the planning around that. Because of that, We're going to be able to focus on what the potential return is for a client rather than just assuming theoretical returns for people. And many people have been really satisfied in this process because they can see, "All right, markets are doing this, but yet my portfolio is not necessarily reacting to just an index, not doing what the S&P is doing, not doing what the Dow is doing, but actually has the potential to outperform because if companies are doing well, then they should be doing well also." So if they own that company, then they have the potential to do well. And that's the differentiator. And that's what kind of makes us a little bit different. And as far as what we do, what we do, we couldn't find anyone else that was really offering that type of service. You know, Nolan Langford, when he started the firm, he had come from Merrill Lynch and Wells Fargo Advisors before, and one of the struggles was he really wanted to differentiate himself and focus more on the actual investment management. You know, look at the different selection of growth stocks out there. And there's a lot of models and portfolios available out there, but none of them really fit what we wanted, or many of them what he felt was maybe too short-sighted. It contained too much group-thinked and lacked a lot of real long-term insight about businesses. That's why, you know, earlier again you hear that saying where Left Brain is looking for businesses that have potential to grow in 2 to 3 years. You never hear that from other advisors or other firms. Those are the kind of commitments that we've made, and that's different than, again, many of the different Wall Street firms that are out there. And our research is independent, but we believe that offering that niche approach and independence is a valuable differentiator.

And quickly, that's also why you would hope, whether it's with your clients or with somebody who's listening to Left Brain Thinking, that like, listen to each stock or bond that's being discussed, but understand that it's got to be the right fit for you. It's not as easy as, hey, we're recommending this, thus it's great for everyone. It's, we're recommending this for people who think the way we do. And if you're that person and if it's right, then you want to follow through with it, right?

That's exactly right, Chuck. I mean, every stock that we've come on here, not every one of our clients holds, because you're right, it's different for everybody. And again, that's the differentiator that we provide, is that we're looking at all these stocks, then we determine who would be a right fit to own that type of stock. Certain stocks have higher fluctuation than others. Others may not provide that income need that a client may have. But we believe they have great potential. But then that's where the planning aspect comes in, and that's where our service can again help those advisors, help those portfolio managers take the information that we're giving and then customize it down to the individual portfolio that we provide. That's what makes it different, and that's what was— we didn't see out there before, and that's what compelled us to kind of create this service and create LeftBrain and cause that whole left-brain thinking.

Freddie, thanks so much for sharing it with us. We'll talk to you again soon.

Thanks, Chuck. Thanks for having me.

Left Brain Thinking is a joint production of Left Brain Investment Research and Money Life with Chuck Jaffe. Our conversations are not personalized investment recommendations but are designed to engage your brain. Please do your diligence before making any financial transaction. I'm your host, Chuck Jaffe, and you can learn more about my weekday podcast at moneylifeshow.com. Thanks to my guest, Freddy Garcia, Vice President of Investments for Left Brain Wealth Management. Learn more about the firm and its services at leftbrainir.com, and go there for details on the Fortune Makers Zoom event scheduled for April 8th. It's focused on wealth builders, small and mid-cap stocks with the potential to become major players in their industries. Left Brain's on Twitter @LeftBrainIR. Left Brain Thinking is available for you every Wednesday. Find it and subscribe on your favorite podcast app and plan to put your left brain thinking cap on again next week. Until then, stay safe, everybody.