The News Behind the Numbers with Chuck Jaffe

Foreign this is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Nodes, Scott Carson. Hey everybody, Scott Carson here. Just want to say thank you again for listening to the podcast. If you've been listening for a while, you're subscribed to the podcast. First of all, thank you. Second of all, hey, you know, if you're, you're not one of our coaching students or you haven't signed up for one of our three day workshops, here's an opportunity for you. You want to check out our WCN membership. This is the biggest bang for the buck of the notice street. Besides our one on one coaching, this is our monthly membership for 97amonth that gives you access to all of our online training, our virtual workshops, our note weekends, our special one day master classes that we've taught in the past, anything that we have going in the future, as long as you're a live member, if I can't make you or save you $97 a month, I'm doing something wrong. But save you paying 997 or 99 bucks or 399 here or anything like that. We make it affordable at $97 a month and like I said, it gives you access to all of our past replays, our upcoming classes, our access to our special classes. We also do weekly coaching calls with our WC members and also our WC members also get first crack at tapes and lists of notes that we get in after our one on one coach to take a look at them. But it's a great way for you to go. You can also schedule call with me anytime to go through deals that you're working on marketing things, questions you got going on about a deal. We're here to help you. So how do you get signed up for that? Really easy. Just go to noteumbrella.com that's noteumbrella.com get signed up there for you 97amonth guys. Like I said, biggest bang for the buck of the nursery and we want seeds of the family. So let's get you signed up today. That's knownumbrella.com welcome to the no family everybody and thank you for always for listening. Good morning, good afternoon and good evening everybody. Hey, welcome to this episode of the no Close show. As always, Scott Carson jacked up to be with you today. Today we continue our series of interesting people that you meet at fincon. You guys know I'm a huge fan of this event. It's done well done volumes, not only for the show, but the real estate business. You guys know that I advocate marketing and getting out networking with other people in similar fields to help you take your business to the next level. And this episode we've got somebody who's been a journalist, business journalist for over 40 years. Amazing stories to tell. But he is also a three time author. He's also the host of an amazing podcast that I was honored to be on just a few months ago actually at last fincon. You definitely want to check it out. He's economist at Market Watch and he's the host of the Money Life with Chuck Jaffe podcast out here. He's done over 250 days of podcasting every week with a thousand guests for the last 12 plus years. This guy has his thumb on the polls, has a lot of interesting stories, interviews a lot of interesting people in the finance industry. So we're honored to have the, the man, the myth, the legend, Chuck Jaffe Jonas here on the no Closer show. What is going on? Chuck, how you doing today, bud?

I'm doing great. I'm excited, Scott, because you know, people talk to me when they come to my, my show, they always say, well, you've got great energy and I'm just doing what I get to do. I get paid to play. But the fact is your energy is probably as good as mine. So I will simply point out like, okay, for anybody who's like chipmunking us and watching it, faster, speed, stop that stuff right now. Because between Scott and I, we're going to get a lot in but it's, it's going to be fast.

Yeah, it definitely, we, we don't have a problem with speeding up the, the speed on it. You might definitely want to slow it down and read the transcript. So Chuck, you, let's, let's dive into this. You, you talk to so many amazing individuals in the finance space. I was just checking out a few of your most recent guests out there. But you mentioned earlier that you've had some interesting conversations, some very well awarded individuals here in the last couple months about what's going on in the economy. I'm sure that's what ask what's going on with the economy? Where do you think it's going to go? Can you tell me the crystal ball and then I can take it to Vegas to put everything on black or red. You're right. Or white.

Well, well, there's no way I'm giving you the betting odds that I'm not going to do. But at my show, and it's Money Life with Chuck Jaffe and I'd love it for people to check it out. I'm not the expert. Like the, the thing is, Scott, if I were doing a piece on, on notes, I'd be calling you and say, let's talk about notes.

Right.

But I'm not the expert. I talk to experts all the time. So let's start with one fundamental idea. And it affects everything that people do, which is disagreement makes a market. Like, you can hate how polarized we are in this country or whatever else, but disagreement makes a market because for you to come to a price on anything, you got to sell it, I got to want to buy it. And if I don't want to buy it at your price, you're gonna have to change your price. And until you change it enough, if nobody's going to buy it, well, we need disagreement to make a market. So what we say all the time, you are in the middle as a consumer and an investor, you are in the middle of the disagreements. And we try to make sure that you understand what all the different people are thinking. And that way you can decide where you want to go. Because the one thing I know is that you need courage of your convictions. So when you and I talked at fincon last year, I'm not sure that my average audience member is somebody who is necessarily your customer. And that's totally fine.

Yep.

But what that also means is that your standard listener would probably get into an argument about, well, hey, I'm using notes, why aren't you? Yeah, and, and what I say all the time, there is no one right way. There is the way that works for you. If somebody goes into your side of things, they say, I want to do notes, but they kind of want to do it halfway. They're gonna suck at it and they'll come away going, that doesn't work. But if they go in whole hog and they really try to learn it, etc, it can work for them. And it can work for them. Even if they're going, I'm not diversified, I'm not, whatever. So we try to get into that disagreement. So we do talk with the leading economists. I mean, we've had Nobel Prize winning economists, but we've also had economists from places like Vanguard and Fidelity and T. Rowe Price and name them the big and the small firms. And in fact, one of the things I say, if you want to really check out my show, it's always easy to go, oh, there's a big name guest, that guy's coming. That's easy. Like for us when we're doing the media stuff, you've got a great guest, they're coming on. It's obvious that's going to be a good show. The one where you don't, you've never heard of anybody but you go, oh, wait, that guy was really smart. They located so. So what I will tell you is there's no question right now that the small, the soft landing camp is winning the day. That. But in that there's a few different things, which is are we going to have a soft landing or have we already had it? Like one of the most interesting commentaries I heard recently was coming from someone who basically said this right now with Shiraz Meehan from Zach's Investment Research going this right now is the soft landing and the recession that you would have expected us to get within an inverted yield curve. It's not coming in the classic form, but we've had it in rolling little recessions here and there in parts of the economy. And again, for an investor out there, you know, the betting odds should not be I'm going to Vegas to better what I want. It's, can you afford to be out of this market? If you feel bad about this market, can you afford to be out? And, and you can say, I want to mitigate my risk, I want to do other things, I want to get into alternatives. I want to look for things that have bigger yields. You can go to all that stuff, but your fundamental decision is going to be, can I be out of the market and still reach my goals? And what I'll say is, the hard landing folks, they shouldn't be scaring you out right now because none of them, even as bad as one or two of the doomsayers, have made it sound, they haven't made it sound like it's going to be doomy for long.

Right?

So, you know, if that if you're asking me for odds and how I personally would read what I've been hearing on my show, the answer would be I don't have an. As much as I believe that a downturn is coming probably in the 2026 time frame, maybe a little bit further out from that, I do not believe it's necessarily going to be deep. It may be long without being deep. Like we could have 12 to 18 months of sideways that will suck in terms of how we feel about it, but it won't be that bad in terms of what happens to our portfolios. But I would not, I do not fear the downturn so much. And again, if I was more afraid of a downturn, I'd be adjusting my portfolio to say, how will I weather it? And I'm also just for folks who want my personal preview. I'm in my early 60s and I'm not looking at retiring anytime soon. But I am very focused on. On generating income. So, you know, I'm not doing it necessarily through notes and things along those lines. I'm doing it in more traditional ways. But even I'm looking at untraditional alternative investments and things like that because, yeah, income is, is fabulous. And I do feel that at some point between now and when I am likely to say, okay, maybe I have to retire, that we will have a big downturn.

Yeah, I think you hit it right in the head there. I we. I don't. It's not. Everybody keeps asking me, is it going to be as bad as like 2008-2010, the housing markets? I'm like, no, it's not going to be like that in the residential because we just have such a lack of housing out there. In a lot of cases we. And we have a bigger need for affordable housing. I think we're going to see some of those affordability markets or there's more affordable. Cities and states across the country just absolutely do well as people will move into those areas to afford stuff. But what we are seeing, which is already hit now and will be more dramatic next year because I see things six to 12 months ahead, like most traditional people on the debt side, is the commercial real estate space. We're already seeing that kind of shakeout from what happened in Covid, we called it back then, and we're seeing that in specific asset classes. But there's always money to be made, whether the market is up or market is down, if you know where the opportunities are and sometimes bet against the market.

Well, so commercial real estate. We had two very different interviews about commercial real estate on the Friday, October 18th edition of my Life. So one of them was with David Ellison, who is. I've known him for decades. He runs the financial services funds for the Hennessy funds. And David got specifically into the idea that could we have a commercial. A crash basically created by commercial real estate. And his answer at this point is no, because it's been telegraphed for two plus years and it is so out there and they've reacted. So he does not think it could be that bad. Flip side of this is that that we had an interview with Dana Staggs who runs Arrow Mark Financial now Aromark Financial. Talk about getting into the weeds on what somebody does. This is a, this is a company, it's a closed end fund, non diversified and you know, you close notes, they buy regulatory capital, relief securities.

Wow. Okay, that's definitely niche.

What that really means is banks in this country have to keep a certain amount of regulatory capital in order to say hey, we're in good standing etc and sometimes they want to be able to do something with their money and they need somebody to kind of float them some cash short term or whatever. That's what these guys are writing notes for. By the way, there are times when some of these notes will be paying them 15%. You and I could never get into those notes personally. That's not the kind of notes you could do. But you could buy a fund that does it. And his biggest worry was commercial real estate is still the thing that could reign the game and create the problems. So again I don't think we're going to see it. And let's just point out that everyone who is worried who's coming to you is talking about 2008. Well, I'm old enough to remember the 1980s and the savings and loans and.

The RTC days Y resolution.

And for anyone who does not remember, I, I tell a story of how bad it was that if you think this is what we're going to just imagine this. My among my best friends in life are my friends John and Linda. John and Linda were people that I met when I lived in Florida in the 1980s. And around the time we met them they bought this lovely condo in a building out on the beach. Clearwater Beach, St. Pete beach area. And then the SNL crisis hit and they had bought their condo for let's say $60,000. But most of the condos in their building hadn't sold and the bank was gone. The bank was the SNL that had financed it. Forget about it. It was a failure. So they were facing a thing of they're paying a mortgage on a $60,000 condo and the exact same unit at the other end of the hall or upstairs in the same footprint is now for sale for 24,000 bucks. They literally walked away from their unit, bought the one upstairs or at the end of the hall, moved to the other end, like had a bunch of friends over, hey, help us carry our stuff. We're moving over there. Just like to the end of the hall. And afterwards we'll drink a bunch of beer and we won't be sweaty because we're not carrying that much stuff. And they walked away from their mortgage. They didn't ruin their credit. They didn't do whatever. We are not in a space, no matter how bad this looks to you. That's not where we are. And neither are we where we were in 2008 where so much of the problem was systemic. And here it's not going to be systemic because we do have that bit of knowledge. I'm not saying we're not going to see another shoe drop when it comes to commercial real estate. I think we will. I just don't think that's, that's a, that's an unknown known. Right. Like you gotta. It's the, the we. We don't know how it's going to turn out, but we know it's there. That's far less worrisome than the opposite of that. The known unknowns. Like, I know I don't know anything.

Yeah, I had a funny semester. We bought a note on a house down in Naples, Florida where I finally get a hold of the borrower and I know that he owned. He did a cash out refi, pulled some cash out of his house, about a half a million dollars in cash, went and paid for another house for half a million dollars cash and then walked away from the first one. So he did basically the same thing. It was two blocks down the street. Not financial. Well, what am I going to do? I'm not going to pay that mortgage. You can come after me. Yeah, you can try to do a money track. But my attorney. You're not going to be able to foreclose. So go foreclose on the house. That's what you're. There's no cross collateralization. I was like, you're 100, right? Okay, we'll just, just sign it over then at least so I ain't got to go through foreclosure. Yeah, I'm glad to do that. If you forgive the debt. I'm like, okay, but that's, you know, those, those things are happening. They happen in extreme markets. Like we talked about the 80s, 2008-2010.

But, but remember that in your case, I'm hoping that the property that he signed over to you was worth something close to a half million. And his problem was his financing. In the 80s he would have bought a half a million and it would have been worth 125. And what you would have gotten Left would have been 120, would have been 125 if you were lucky.

Exactly. Well, what it was is that he cashed out, held the cash for a while and then the market tanked and he bought a million dollar house for half a million at that point. And he's like, well, it's, it's actually the same square footage. I can get into it, get out of it and not have to worry about the interest rate and everything else over here. And I'm like, your numbers don't lie there, grasshopper. I can understand why you, yeah, you did that. But that's, that's the thing is you see that happening right now too in Florida with a lot of these older condos that are taking place where they got these huge assessments. There's this big scare because all these assessments are underfunded in these individuals. Homeowners, condo owners are getting hit with six figure assessments and their HOA is going up and they're on fixed income. So there's a lot of people hurt there in different parts of Florida, not excluding the hurricane. But yeah, there's, there's issues everywhere in specific aspects, but it's not a nationwide, oh, the sky is falling like we've seen two times in the past 40 years.

Well, right now, that situation, that's the known unknown. Yes, right. That's the one where if you go back and you look in. The New York Times did a great piece on it where they were talking about how basically you had the building collapse in Florida. And then after that, every homeowners association, every condo was like, okay, we're going to, we've got to come at you with a whole bunch of fees and do a bunch of stuff because we have to protect ourselves. And they're not wrong to do it. It's just that, you know, it's kind of like anything if you, you know, if you don't brush your teeth for a long time, when you finally have to go fix your mouth, expect it to hurt. Like, that's the basics of this. And unfortunately, think a lot of people bought something not understanding what could happen. And this is that we didn't know that's what came and bite you.

Now, with your extensive experience in business and in writing and being a journalist and stuff like that, you were the past president of the Society for the. I'm sorry, the sorry Society for the Advancement of Business Editing and Writing. And that's an interesting thing I want to talk about because you're now back on the board of that. Can you talk about what that is and why people should probably listen to that or pay attention.

So when I was president it was the size the Society of American Business Editors and Writers and it basically was the business journalists of the country. So the same way that you could have the investigative reporters and editors or you know the black journalist group that came up which was the political the presidential candidates talked in front of this is for business writers. And then they modernized it because as newspapers have become less of a thing it was less about so it became the society same acronym Society for advancing Business Editing and Writing. And I'm back on the board because at fincon, I mean you are, you are not a journalist, Scott, but you are a content creator. Yeah, but as you know at fincon you have people and I'm a content creator. Our content is by nature very different. And one of the reasons that I'm back on is that I see a lot of what I consider bad journalism habits among Fin Conners and I'm not going to pick anybody out and I don't blame them. I've been writing since I was 14 years old. I got paid to start writing and covering school board meetings in Livingston, New Jersey as a 14 year old boy. So I certainly understand what people will do for with and about deadline. Right. But I also want standards to be higher and, and I will see things, you've probably seen them as well where sometimes you get somebody and they're looking for an expert. Right. They're in the fincon group and they're saying I need, I'm talking about people managing credit card debt properly and I need a financial planner who can quote, you know, a cfp.

Yeah.

Have you ever thought about that? So here's what I'll tell you. If you want to go hire a financial advisor in real life, do you know what? They're probably not going to help you with your massive debt problem. That's not what they do. They want you to have money when you come to them. It's not to say that there aren't financial planners who are expert there. It's to say you're going out after a group where either you're concerned about we need to say we've got a CFP because that way we get search engine optimization and our story gets more hits or I, I convince the editor that I'm actually looking at important things or whatever it might be. You've got some of that going on and then you have as well some where you are literally just watching stuff going. Could you raise the level of Your sources, You know, in fincon, the incredible resources that we've got. There's a woman named Jerry Detwiler.

Yep.

Before the Internet, Jerry Detwire wrote a book called the Ultimate Credit Handbook. So if you had been somebody who was. Had a debt problem in the 1980s and 90s, that would have been the resource you would have gone to when you said, I got to get my head around my debt would have been her book. She has literally helped millions of people. But you'll get somebody who's. I'm looking for a source who's expert in getting out of debt. And somebody come forward, and if you read their story, as you and I will do, we'll go to their websites or whatever. You go, wow, they had $50,000 in credit card debt and they got out of it. That, by the way, does not make them expert. That makes them experienced. And they're equally experienced at how to mess up your finances and get yourself into $50,000 of debt. But somehow they're not telling that part of the story when they're being posited as an expert. So whether it's things like that or just trying to make sure that we have best practices, fincon is very grassroots. And without getting into media. Let's talk about how this works, because we all think about democratization of things. And look, I was a syndicated financial columnist for 30 years. People don't understand how syndication works. But think about it this way, right? So you, with your show, you run a website. Let's say you want to make sure you have dynamic content all the time. You could say, oh, let me go find a syndicated columnist and I will put their comp. So you could say, I know I've vetted the best financial columnists out there. I'm bringing them to you on the days that I'm not on my show or doing whatever. Great. And. And people think that syndication died out because newspapers were dying, but that's not true. Do you know who killed. Do you know who killed syndication, Scott?

No. Who do. Who killed syndication?

Google.

Oh, yeah.

And they did it. And they did it under the guise of trying to make us smarter. And here's why. If you said, I'm going to. I want to buy Chuck's column, which is no longer in syndication. We would have sold it to you for the price of a pizza. Right. That's what syndication is. You can't afford to have me on your staff, but you can buy my work. You just can't originate it. But in a Google world, even though you've done, you've been a good gatekeeper. You've gone and looked and you've said, I want to bring you these five voices. You're not originating it. That means you lose domain authority. So even though you're paying a small price and you've done the work, you're not getting what you want. Like even if you get the traffic, it's going to something that you didn't originate. Google's going to try to send them to somebody else. So you lose search engine optimization stuff. So now remember when you started, you were doing it on a shoestring. You can't hire me to come and write your piece because I'm an experienced, you know, multi decade journalist. So you find some kid who's fresh out of college who, they have got no clue what they're doing, but they know that they need a paycheck and they know that they're willing to do it for 100 bucks or whatever and you go, okay, we'll do this. So they produce content that, oh, by the way, they don't know who to turn to for sources and they don't know what to do. They produce content that's mediocre, but at least it's originally mediocre. So you get domain authority and Google loves you. It's bad. It's really bad because it makes it that yes, we can democratize information, but not all information is created equal. You know, you and I were talking before the show. I had somebody at a party this past weekend that told me, you know, maybe I didn't understand the political plans of a certain candidate because I didn't like what they were talking about economically. I was like, no, you know, A, I've got a degree in economics and journalism, so I've been watching economics for a long time. B, my position is supported by Nobel prize winning economists and C, I asked those guys the question myself. So, you know, it's not the same as I went and found something and I found a guy who said whatever and, and that is a real problem because we want the best solid information and it's really hard to discern.

Yeah, that's the thing. It's the whole grassroots effort of the double checking a source and going deeper than just what's the top three articles that Google spits out for you?

I want you to think about it, Scott, because you've seen the pitches.

Yeah, right.

So if someone was sending out a pitch that said, hey, I want someone who does alternative investments and is looking at something like, like notes, but It. And. And you see a bunch of other people and. And all they're doing is saying, I'm putting out a Google document. Throw your quote in there. Tell me how I can promote you. Yeah, I wouldn't blame you for responding. But here's the thing. You're. Even if you had a worry, if you said, man, this is a dumb story idea because it's directing people in the wrong way or it's thinking about this wrong, if you had a conversation with me, I'd go in a completely different direction. Well, they've let you know they don't really want a conversation. That's bad journalism. They want something that's in there. You want to sound bite, you want to be in the story. So whatever you agree with, that's what you put in there. Gives you the best chance of being in their story. And we're a grand old echo chamber that doesn't do it. As a journalist, I wrote the Stupid Investment of the week for 10 years, and I cannot tell you the number of times where I went in to talk to an expert early in the process, and I was absolutely convinced there's a fork in the road ahead and we're going to the right. And they're like, dude, the real story's on the left. And you're like, how is that possible? And then they show you and you go, thank God I talked to them before I went down the road on the right. It's one of these things that we absolutely need to understand our sources and where they come from. And, you know, again, go get your source of information, business, political, whatever, any place you want. But understand that how you react to them is the bigger side of things, right? We talked earlier about guys who are doom and gloom about the market, okay? If they scare you out of the market, if you want to buy into their case, well, you could buy another case by being all out, which is very rare. The question to me would be, are you core and explorer? Right? You have a core and explore portfolio. Here's your core that's gonna stay in market stuff and whatever you got, and then you explore around that. If you want to take all your explore money, get it out of the market because you're afraid that something terrible is happening, okay? That's you making an asset allocation decision, whether you pay for it or not. You knew that explore was for good, bad or otherwise, right? You didn't blow yourself up. And that's where some measure of. Let me listen to all sides Bring it together works.

Well, it's funny you say that because as you're talking about that, I'm hearing conversations. We have it happening in the real estate space. You have people that come out and they're focused on one little side of things, and they, you know, they have a workshop or they do a webinar. They teach. They teach a class that's secured just to one way without. And telling people it's just one way without ever having experienced the other side of it. And half the time I'm filming phone calls from people wanting to get what I do, and half of it is explaining, no, that's not actually accurate. And here's why. A, B, and C, that doesn't work in today's market. Or it's different than how you got pitched on it. And I often feel like our media is pitching one side of the story versus hitting both sides of the story. And I think you feel the same in a lot of cases.

There's no question. You know what we call that situation that you just talked about?

What?

That's called man with a hammer syndrome. To a man. To a man with a hammer, every problem looks like a nail. I know how to fix this. Bang it out, right? So when somebody comes to you and they say, oh, like, it's the same thing, I would not be surprised if I said, hey, Scott, how would you invest in this economy? Notes, dude.

Yep. Discuss debt. That's exactly what I would say.

Economic conditions have turned. How would you invest in the economy now? Notes, dude. I'm still going. Like, I understand that that's your thing, and that's fine, but my responsibility is to try to say, okay, if we're looking at alternatives, your notes versus those regulatory capital, relief notes versus, you know, ooh, I'm really scared. Do I just want to be in a high yield, savings balance, Right. Account, settle for 5%, whatever it is, that's the discussion that I want to have. I want people to sort of understand all sides, because it's not about making the best decision. It's about making the best decision for you.

Exactly, exactly. And that's. I'm so glad you say that. Because everybody is so different when their background or their risk tolerance or their experience levels or what they're comfortable with. Everybody wants the highest yield, but they don't necessarily want to do all the work that goes into that. And that's part of my job, as I say, is like, okay, you're not a fit for what we're talking about. You need to go do this instead. You want something, but you only spend an hour a week. Then you need to go do this side of the investing side, go buy something different. Or you're, oh, you only want to invest in this one little area. Well, there's not a lot of distressed stuff out there. You need to go somewhere else or change your parameters. And that's, that's happens hearing both sides of that person's story, not just the rosy side of it.

Well, if, if you want to know how it works. One of my favorite stories, which I do believe is true because I talked to people who were close enough to the situation, is there's a legendary story about how Groucho Marx went to tour the New York Stock Exchange. And although Groucho over the course of his lifetime had some financial problems, he was known for being an investor. So closing bell rings and Groucho is holding court with guys on the floor and crowd grabs around him. And somebody yells out and says, groucho, how do you know what are you investing in, etc. And he says, I keep most of my money in bonds. And the guy yells back, you don't make much money that way. And Groucho's response was, you do if you have enough of them. It's so true. So, so again, you know, if you want to do it a certain way, you have to understand it's right for you. My, my father was not a particular risk taker. Okay. My mother, by the way, was. They managed their money separately. Together they had a great portfolio. Either one of their portfolios, you would have said, oh, that's psychotic for someone your age. That's equally psychotic to the other extreme for someone your age. But it worked for them. And that's what you, you know, again, disagreement makes a market. Find your place amid the disagreements.

Exactly. And talking about disagreements, you know, there is oftentimes, especially today, there's such a knee jerk reaction. If you don't agree with somebody, you're dead to them or you're the biggest idiot or I'm gonna sue you. You know, in 40 plus years, if you had anything interesting happen to you with maybe with your stupid investment of the day, I could see you getting a few colorful emails or letters back in the day.

Well, the stupid investment of the week. And thankfully it was the week not of the day. Wow. The best of the week, which I wrote for market watch for 10 years, was a lot of fun. I actually posted something on a friend's Facebook page today. Like I saw something the other day that just makes me long for the days of like, like really would you throw me this fat a pitch. Come on. So I still see stuff and kind of wish I had that forum. Every now and again I've, I've debated, should I just bring it back and make it like stupid investment of the month? But here's an interesting story and it plays into today's partisan politics. A name that some of your audience may recognize, maybe not, is a guy named Tobin Smith. Now, Tobin Smith became famous for a company called Change Wave Research. And I knew Toby for a long time. We were always very friendly, etc. And at some point, Toby started working for Fox. And he was going on and he was still doing his thing, but he was a regular. He'd be on the Octobox, like there were multiple times when, you know, Toby's here on your screen and I'm here on your screen and we're doing market stuff at the end of the day or whatever, because, mind you, I was employed by Market Watch, which had been sold. Dow Jones had been sold to Fox. So we're working for the same company, basically. So Toby sold Change Wave Research. They had a non compete. When the non compete ended, he created a new thing called NBT Research for Next Big Thing. And one of the first things he did was produce this thing that talked about a penny stock. And it literally says, this is the kind of stock I wish I could talk about on Fox, but it's too small. So I get a copy of this in the mail. It's literally a mailed flyer. And I've written about mailed flyer stocks before. I'm really not paying attention to it until a reader writes me and says, I know you hate all of these things, but this is Toby Smith. I see him on Fox, like he's, he's my guy. And so I take a look and dig in. And there's disclosures that have to be made plain. Toby had taken $50,000 to tout the stock. The research was no research at all. It literally said, we're not doing research, we're just, you know, we took what the company gave us and put it out here.

But we're putting a non Kardashian in spotlight to promote it.

Yeah, well, so, so when that happened, my assumption had been that for Toby to be able to do this, remember I was working for Market Watch, owned by Dow Jones. I was appearing on Fox. I'm assuming he's gotten whatever dispensation he needs to be able to do this. And I'm about to write a stupid investment of the week on the piece when we realize, oh, this is bigger than that. Toby took $50,000 to tout this. That puts him in violation of his contract. He's not supposed to do that because he's acting as a journalist.

Right.

Not to say that plenty of other people haven't done the same thing. I, you know, whatever. So to make a long story short, because it took a lot like literally lawyers within the house. Remember, the lawyers would have sat like one of arguing with each other and, and what have you, we wind up breaking the story. Now, I don't write headlines on my stories because depending on how they are on a page, that takes somebody else to write it.

Yep.

And his last name is Smith, for goodness sake. So somebody puts a headline that says FOX contributor Smith took 50k to tout stock or whatever it was, but I know it was FOX contributor Smith. And for the next 72 hours, I get three pieces of mail every minute. Two of them being hate mail and none of them based in reality. Like, look, if you like Toby, who by that time was using the title of guest anchor on Fox. Right. If you like Toby. I'm sorry. You know, as Toby told me, there was a point in this where he said, I think the story you're working on is going to get me fired. And I'm like, do you think it's the story, Toby, or do you think it's maybe 50k you took.

You're not supposed to take.

Yeah. You know, the, the problem with you didn't, you didn't double check this with the bosses before you took it, Right?

Yeah.

And, and there lies the rub. Right. It's not, to me, it wasn't about Fox. Heck, I was on Fox. Half the people going, you know, you work for CBS market Watch. Okay. CBS had owned 8, had an 18% ownership stake. Never owned us, never ran us, didn't do anything else. I never knew anybody at cbs. Nothing. Right. You know, we work for the same company that was making my reporting really easy. The. Except for the fact that our own internal lawyers were yelling at each other. But to me it misses the point. And whether it was that the very first stupid investment of the week broke a Ponzi scheme and it was a very popular investment that were unsub or this is unsecured subordinated debentures, by the way, for anybody who doesn't understand that they're a form of notes that Scott's not buying.

Yeah. No.

Okay. And these things were being sold in newspapers and promising big yields at a time when yield was not there. And you Read through the prospectus, which no one had done, and somewhere in the 78th to 81st page, there is a note that says in their risk factors, if we cannot continue selling these notes. Right. If we cannot find new buyers for the notes that we already have, we may not be able to pay interest on the old notes. That, by definition, is a Ponzi scheme.

Yes. Wow.

And, oh, by the way, that had gotten blue skied by regulators who had read it, because, trust me, when I called them to say which one of you signed off on this, there were heads rolling because you can't do that. Like, that's not a thing. So it was literally a legal Ponzi scheme that had been functioning really well as a Ponzi scheme will, until someone recognizes that there's. The emperor's wearing no clothes and points it out. So the very first stupid investment of the week, people are hammering me, and I'm like, okay, you can disagree with me, but rather than yell at me, now's the time when you should be figuring out what if he's right. Right. So again, rather than. Than saying, you know, in the Toby Smith case, you're a leftist. He's, you know, whatever, don't pick on Fox. What it should have been is, wow, you know, how does this not happen? And, like, help us understand who doesn't have conflicts and who does and where. I figure this out. And does this happen all the time? Because it does happen more than you'd like to believe. And the fact that somebody's on your favorite network doesn't make them a good guy. It does. You know, by the way, if it did, then why were you taking it out on me? Because I was on the same network. Yeah, right. Like, if it made me a good guy, if it made him a good guy, should have made me a good guy because I was Fox contributor Jaffe at that particular point in my life.

Wow.

So, you know, to me, we can, and I do believe the lack of civility in this country is arguably our greatest problem. Because if we can't be civil to each other again, there's no one right way.

Yep.

Disagreement makes a market. You're not a. When you buy something that I'm selling, I'm selling it. Maybe because I think there's something better out there. Maybe because I need the money. Maybe because, you know, whatever it is, there's circumstances. It doesn't make me an idiot that I'm on the opposite side of your transaction. And that's where you'd like to think you could learn because what I can tell you is the guy who, in that scenario and everything going on. And mind you, this was, you know, this is 15 years ago at this.

Point.

But I did a radio interview in Boston where the host basically doxxed me. He wound up saying, where I live. And I had not finished that interview. My home office had its own phone. When the home phone rang and one of my kids picked up a call that said, you know, tell your father we know where you live.

Oh, my goodness.

Now, mind you, really, that's what you want to do on a. You know, did I cost you money? I don't think I did. I mean, you know, and nothing, of course, came of it. I have. The scary part for me was my kids were freaked and I was traveling that weekend. I had to call the police and say, hey, would you watch my neighborhood a little harder this week? But what prompts you to do that? Like, there's the answer. Should be, let's understand it, right. Had I been saying, you're going to see a money market fund, break the buck, you know, again, shooting the messenger doesn't help anybody.

No, it doesn't.

Now what you should be doing is let's dig in. Let's go with the sources. What I'll point out is for all the people who are hammering me on that story, Toby never denied it. He did it. It was in paperwork. It was right. You know, he said, I did it. It was not. That was never the problem again. Had he disclosed it? Had he done whatever, had he been living it up? You know, Fox didn't fire him because of what I wrote. Fox fired him at that point because of what he had done. And that's where you hope that we can always keep our eyes on the ball. That's why I'll have people on my show, my audience members and I have a dedicated crew of people that talk to me about every interview we do pretty much. And they will say, I really hate it when you get Harry Dent, who's a doom and gloomer on the show or whatever. Yeah. But you need to know what the other side is thinking. You are far wiser to understand the whole picture and to, you know, again, for the people who were unhappy that they owned those unsecured, subordinated debentures and, and they hadn't read their own documents. And I don't blame them because it was buried, but, you know, you thank goodness. I hate it that people lost money, but somebody was going to lose money because that was inevitable that it was going to happen. And there Are as many people that I saved money or what have you as a result of it.

So, you know, and that's why they call it investing, not guaranteeing. You know what I mean? You've got to, you've got to be held accountable for your, either your actions or your lack of inaction in a lot of cases. We've seen so much of that similar things happening in the, the multi family space for the last few years and people over paying and they're not the interest rates killing people or people changing their perspectives upon that. We're guaranteeing, guaranteeing a return on capital, not a guarantee of capital, which is a big red flag out there. But that's, that's everywhere. Big red flag.

You know, Scott, if I were, if I were doing stupid investment of the week right now, I'd be like, hey, next time you find a really good one, can you. One where maybe you don't want to go through the, the multiple pages of the prospectus and you want somebody to dig in because trust me, I have seen goofy stuff in prospectuses. But, but again, you know, people don't want to believe it. And yet we have it. One of my favorite old classic stories in the 1980s, the, the 1980s version of Jim Cramer, before there was ever a Jim Cramer, was a guy named Sonny Block. And Sonny Block, Bloch, for anybody who wants to google him, Sonny Block was like a former band leader who became a broker who wound up having a syndicated radio show was known he was selling, among other things, you could buy shares in gold bars. Now this was before there were precious metals ETFs backed by physical gold.

Right.

This is also the reason why it took the SEC like an extra decade to be able to approve those things because Sunny was selling you shares in some zinc bars that he painted gold.

Oh.

Okay, so, so he wound up, you know, going to prison. But again, you had, Sonny wouldn't do this to me, etc. Okay, look, I understand where your allegiance lies, but as a general rule, in my experience, math is irrefutable. When you can look at the math and you can say, here's what the numbers are telling us, trust that. Like, and that goes for me politically as well. Like when I'm looking at things, I'm not, I'm an unenrolled voter, which means I'd vote either way. You know, famously, Chris Christie was my high school class president.

Okay?

But I voted Republican. Debit. My parents were Republican. I'm going to go for smart government. That's what I want. The Most. But whether it's government or whether it's business, somebody says, here's the numbers. I go, great, let me dig in on the numbers. Because the numbers, as a general rule, I can at least get my head around them enough to say, now I understand why in favor of this investment or I'm supporting this candidate or I'm looking at something that makes sense to me. I understand if you want to look at something different. I understand if other things want to get there. But ultimately we can argue personalities, we can argue, I prioritize this issue over that issue. But in the end, I can promise you that if you bring me different numbers, I'm going to respect your numbers. I'm going to look at them, try to figure out if they're right. And I would hope that you would do the same with me. And then maybe we can both come to whatever decision we're going to make. But again, it's the people who are going, I heard from some economist, okay, I heard from a better economist. Almost like, I don't mean to sound horrible that way, but yeah, I did.

It's almost like, it's almost like this scene in it, I can't remember what disaster movie where the, the scientist comes to the President says the end of the world's gonna happen in a week. Well, my guy says it's not gonna happen for another 20 years. Yeah, but your guy made his C and barely graduate. I was the president of the class.

Well, I mean, it's, you know, let's remember George Custer, you know, graduated from West Point, but he didn't graduate at the top of the class. Again, it's not, you know, my job is to be able to ask questions. Right. So when you are hearing the stuff, what's the follow up question going to be? I'm very hard on myself when I miss the question I should have asked. And that's because you get access to these guys. And, and I'll point out that, you know, yes, I talk to economists who have wacko theories and whatever else you want to do. But there's a reason why the global chief economist at Vanguard is overseeing more than a trillion dollars. And your buddy up the street who took an economics class at night when he decided to go back to school and get his mba. I'm not saying he's wrong, I'm just saying he's like a trillion dollars short of that. Two or three trillion dollars short of that.

Just a little bit. It's just a matter of zeros or commas.

Yeah, well, it doesn't make him. It doesn't, it doesn't mean I shouldn't respect his opinion. It just means that in the end when I get the preponderance of evidence when you know, again, soft landing scenario. Yeah. I hear it from enough people who have gazillions of dollars. Right.

Ask you a question here because I guarantee my audience is thinking where do you get your news or what specific place do you watch to stay abreast of the markets or breast the situation of what's going on out there?

Complicated question.

Yeah.

I do tend. So most of my market stuff I start, my baseline is Market watch.

Yep.

Market watch of course is part of Dow Jones. I have ties there. So of course that means I also have ties to the Wall Street Journal. I, I tend to. So here's what I would tell people to do. Let's do it in actionable fashion.

Okay.

Go find the cheapest subscription you can to whatever the best you consider the best news source you can find. So let's say that's the New York Times right now where you could probably get it for like four bucks a month for a six month subscription or something like that. And you won't get everything, which is a shame because like their recipes are great but you know, go off and then I'm not saying dedicate, read it cover to cover or read it, you know, every single page, but read the stuff that this headline I want to see if it makes me angry, etc. Don't judge it on one. Give yourself that first month when your subscription runs out or when you can't stand it anymore. If you go, oh, it's too whatever for me, find the next. So in other words, if that means, oh, the Times is ending and I'm going to the Washington Post, try that. I prefer the traditional sources of media because I know for as much as we are talking about journalists, the problem with journalists is that in an environment where everything is about clicks and moves and whatever, we have to talk about stuff that does not necessarily make sense.

Yep.

Or stuff that it's going to make a headline, it's going to move it. Because I can tell you the trouble that I have on my show. We, we're there every day that the market is open. We're giving you great opinions on what's happening on the market pretty much every day. But I've had people say, you know, the show, it's kind of, you hear the same thing again and again. I can't make the market do something so that my show will Be more interesting.

Right.

And I don't choose to spend too much time focused on stuff that might bring us more clicks but wouldn't be real. So an example of that, I had somebody the other day tell me I did not have the stones to talk about the tax proposal that's going to tax unrealized gains. And I said, I have all the stones necessary to discuss that. I just don't believe that the vast majority of my audience has over $100 million in asset.

Right. Yep.

Okay. And they came back and said, you don't know that that's okay? I don't know. You're absolutely correct. But my source of information on it, the former head of the irs, again, I'll trust my source. And he wasn't the only one. So if you, you know, it's where you want to say, you can say, oh, it's fake news. It's whatever. But again, somebody was yelling at me, it's fake news. That thing really wasn't a Ponzi scheme. It's fake news. Toby Smith would never have taken money to do this. All those things were supposedly fake, and none of them were. And I know what we have to do. So I do prefer old wine sources. I do read them with a jaundiced eye. Okay. I have no problems saying, I understand where this paper is, and I watch very carefully for where someone wrote winds up showing their biases. So my hobby gig, I'm an official. I'm, I. I referee sports. And specifically, I referee the sport of lacrosse.

Oh, nice. Okay, so.

And I only referee girls lacrosse at this point in my life. And here's the thing. People think they're doing me a favor when, you know, something happens and I make a. I blow my whistle and I point to certain. They're like, good call, ref. Good call. You're not cheering me when you do that. You know what you would cheer the ref with? Call, ref, call. Because good or bad, I'm not looking. I'm not trying to make a good call or a bad call. I'm just trying to make the call. And that's my job. Now I understand as I tell people all the time, I did a. I did a tournament a couple weeks ago. I had one particular parent who was convinced that his kid, if she dropped the ball, she had to have been found. No way his precious daughter was not getting straight to the goal every single time. By the way, there's a lot of way that she was not getting straight to the goal every single time. She's not very Good. But okay. And mind you, like fifth grade level, we're talking young kids, right?

Helicopter father. Yeah.

There comes a point where the guy is yelling at me and I turn and I say, look, given, you know, I, I totally get that from where you sit with your understanding of the rules, it's what you are yelling at me like that. That had to be a push or that had to be whatever. But from where I stand with my understanding of the rules, it's exactly what I'm suggesting is happening here. And by the way, I have no idea what you sitting in your lawn chair scored on your ref test, but I know that you didn't score higher than I did and you're not trying to actively, dynamically be in the right position to make the call. Now when you get a real jerk, they respond to that. And thankfully, that's what happened to this guy. And he said, how could you possibly know you that I couldn't have scored better than you on the refs test? What do we say about math? Math is irrefutable. Well, because I've been reffing on the girls side since 2006 and I haven't gotten a question wrong on the ref test since I started doing it in 2006. So if you've been perfect, well, you've done just as well as I have. That's not to say I'm perfect when I'm making my calls. I understand. Like, think about this, by the way, as we digress rapidly. When you watch your next football game and they show you, if they wanted replay to say the ref got it right or the ref got it wrong, the replay would be Google Glass right from where the ref sees it. Because if you swing it around like how many times you see it, they go, oh, we'll turn the different angle.

Yeah.

And, and I'm gonna point if you really want to have your mind. I used to do play by play in the National Lacrosse League. That's the, the professional indoor lacrosse. And at certain arenas, including the one that I was working at in Boston or in at the Mohegan sun, they would have a K a camera above the goal line. And so if the ball was trickling across, you had the boss to get all the way across. They would then zoom in to try to show you the ball. Google something called the parallax effect. And then it's like, okay, yeah, don't ever give us that angle. Because when you zoom it in, you change the optics. When you change the optics, it may not be right.

Exactly.

And so Everything can be manipulated. And that's before we get into a world of fake news and whatever else. So, you know, what I'll tell you is always start with what's plausible, not what's possible. Right. Start with what's plausible and then go to what's possible. And if you. And the reason for that, whatever your news source is, is, you know, look, we've all watched action movies, right? Okay, so if tomorrow a real life. Pick your favorite Mel Gibson and Lethal Weapon. Steven Seagal and whatever. Jason Statham in, you know, the Beekeeper.

Yep.

If tomorrow some agent somewhere leaves a trail of 50 bodies, you think it's not going to be on the news somewhere? I mean, we all have cameras. We all have whatever you think that that person is gonna like. Even if they have whatever, we would know. We know. You know, you walk into an unfortunate setting anywhere in this country and start firing a weapon, we know in seconds, in minutes. So, you know, I take a look. Okay, I get it, that what you're saying is possible and I respect that. But start with what is plausible. Always take a look at, you know, again, if you're going to say, oh, we're going to tax unrealized gains. Okay, that's a nightmare. How are they going to, like, just start to think about how. The IRS has no mechanism to value that it is not plausible. Is it possible? I suppose it is. You could find a way to do it, but it's not plausible. So then go. Wait, hold it. Let's dig in a little deeper. Oh, is it really? Okay, that's where I can find it. So I'm going to defer to the, the old news folks because I know what their standards are, but I'm going to do it with an open mind and again, with an eye towards, you know, does their explanation make sense? Yes. You can go down conspiracy theory rabbit holes, but, you know.

Be smart and have a little common sense.

Yeah.

Deeper dive.

Recognize, recognize that. That the biggest plots of whatever in this country have been uncovered. I'm, I'm trying not to get into a certain thing. If you've ever seen the movie Spotlight. Okay. I worked at the Boston Globe, big institution.

Yeah.

That they were covering, that was trying to cover up what was going on with their personnel that they covered up for a long time, but not forever. So know again, understand that if you're going. Okay, hold it. I get into some wacky political theory or some wacky economic theory. Why aren't we seeing? Why isn't there a piece of it out there? Again, I'm not telling you it's wrong. I'm just saying start with plausible, not with possible.

Amen to that. Amen. Chuck, what is the best place for our listeners out there to follow you or to connect with you? Stay tuned to the great stuff that you're putting out.

Well, any podcast app, I think we're there. It's Money Life with Chuck Jaffe. Moneylife show.com is our website, which is horrible. We'll be the first ones to tell you that. But what I would actually say is go to moneylife show. Libson L I B S Y N money lifeshow.libson.com that gets you directly to our show archives. At that point, you could do things like, hey, what did Scott say when he and Chuck were at fincon? You put in Scott Carson into the search feature and go find it. Now. Some of the interviews that I've talked about here today were interviews I've done for my reporting and not for my show. I'm thinking of like my conversation with the former head of the irs. But you can go find, you say, I want to find out when my favorite mutual fund company's been on the show or whatever. And you can find everything. You cannot find everything all the way back because when we moved to Libsyn, we didn't go all the way back to 2012. Our first big interview guest was Bill O', Neill, the founder of Investors Business Daily. And Jack Bogle was on at the end of the first week. But you can find some old Jack Bogle interviews and you can find a lot of cool stuff in there and root around and figure out what you like. And the show has different components. You know, if you're an income investor and you want to learn more about closed end funds, we do a segment every week on closed end funds and all the esoteric stuff about closed end funds. That's how we get into regulatory capital relief security. Right. So check us out there. The show's on Twitter or X at Money Life Show. I'm at Chuck Jaffe. We do not tweet a lot, but we do tweet when the show is up and there's always a link. So that's another way to find us.

Awesome. We'll put all that stuff in the show. Notes for everybody there. Chuck, it has been great. We could sit here and talk for hours, but I know you've got a busy day. Same here. But I look forward to seeing you here in Atlanta in just under a week or just a couple days. Whenever this comes out. So.

Well, we're going to set up something so that we have you back on my show. Because I would have said no, I wouldn't do it. Not because of you, but because I'm trying to introduce folks. But I got to talk to you about. We're now in a rate change environment, so we got to have that discussion. So we'll have a quick interview. So again, if you haven't found my show, find when Scott comes and gets my treatment. Very short, very different from this, but at fincon, Scott and I will be doing this too. So.

Sounds good, buddy. We'll see you there, man. Be safe. Have a great day. And thanks for being on the Nutri Culture show, buddy.

You bet. Look forward to seeing you soon.

Yes, sir. All right, everybody, go take some action. Go check out Chuck at the links there in the description and go take some action. Do like Chuck says. Get educated. Learn yourself. Read beyond the clickbait headlines and do a little deeper dive and you'll be a much more educated investor and individual. So go take some action, buddy, and we'll see at the top. Bye.

Sam.