Pay It Forward

Given our current economic predicament it’s easy to forget how fortunate we are to live in America; a place where what we frequently consider to be challenges are down right trivial if compared with those in many countries. It can be difficult to imagine an environment where hard work at best yields a meager existence and something as fundamental as safe drinking water is difficult or impossible to obtain. Unfortunately this is the sad reality for much of the world.

Shortly after founding Joseph Graves Capital Management I began looking for practical ways to impact this inequity and recently discovered a simple way to support those working to improve their lot through entrepreneurship by providing microfinance loans. Microfinance was pioneered by Nobel Prize winner Muhammad Yunus and has proved to be an effective means of combating extreme poverty while increasing the living standards of entire communities.
I’ve created a group here: Managed by World Vision, a not for profit humanitarian organization in Federal Way, WA making it easy to partner with me in this immensely important and personally satisfying endeavor (they even allow you to login with Facebook should you desire).
For less than the cost of a meal at Burgerville you can improve the lives of people in desperate need and in addition to being a tax deductible donation it’s also a great opportunity to do well by doing good.

Please join me in making a real difference in someone’s life; we have 30 days to exclusively fund our first loan to Justine Nibakure a woman from Rwanda to purchase rice, beans, and sugar for resale in her shop.

Historical Deja Vu

Financial pundits love citing history and the myriad of anecdotal quotes that extol one strategy or another; comparing valuations and prices to bygone times, confident (or perhaps just hopeful) of a reversion to the mean.  But what if the history we are repeating is part of a larger cycle than the last 10, 20, or even 50 years?  What if the historical cycle we are allegedly repeating is more significant than just another economic recession?  Conversely, what if we are actually in uncharted territory?  What if globalization and the information age have plotted a new course, one for which we have no map?

As a country we face significant challenges; ones not simply resolved with collective optimism.  Like spoiled children we’ve ignored wisdom and squandered our inheritance; an inheritance not of a monetary endowment but a socio/political/ economic system that allowed hard work, ingenuity, and intelligence to be justly compensated.  My chief question is whether we’ll continue down this destructive path blissfully ignorant or wise up, make the necessary adjustments, and hopefully return to the ideals that previously allowed us to prosper.

From an investment perspective multiple possible outcomes is just information; it’s possible to profit in any environment if one is willing to question assumptions, face the facts, and act accordingly.  Success depends on preparation for a variety of outcomes, an ability to adapt to changing conditions, and a recognition of the unknown.  I plan to be prepared for whatever may come, protect what we have, and take advantage of opportunities as they are uncovered.

Have fun,

Joseph Graves

“In times of change, learners inherit the Earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”

-Eric Hoffer

13 Answers to 13 Questions

1. I operate as the Chief Investment Officer for my clients by collaborating with them and other professional advisers on retirement, life, and finance issues.
2. Every relationship I begin is very similar to the way you’d start a friendship, through a conversation or series of conversations whereby we are mutually attempting to discover if there is enough synergy to merit working together.
3. Interesting people who are intellectually curious, technologically savvy, and aware that the use of money is the only reason to have it.
4. Curmudgeons, lemmings, and the mentally apathetic.
5. Regularly as needed ranging from multiple times per month to every quarter, but no less than annually depending on the clients wishes. I prefer email, telephone, and web conference but will also meet face to face when necessary.
6. 40-60% of my time is allocated to working with clients and tasks directly related to maintaining our relationship.
7. If I’m awake, I’m available. From morning to night. I regularly speak with clients and their advisers outside of traditional working hours. Conversely I may not be available to chat on a Tuesday at 9 am if I’m talking with my wife and kids.
8. I’ll cap the number of client relationships at 75, currently I have about 60 (as of March of 2010).
9. Almost none. While this type of activity may lead to new prospects it does not enhance relationships or add value to my existing clients.
10. The simplest explanation is I attempt to buy assets at less than they are worth. What I buy and when I buy it is driven by my global macro economic view and fundamental analysis.
11. 30-50% of my time is allocated to investment and economic research.
12. In addition to the mandated continuing education requirements of FINRA and my broker dealer Commonwealth Financial Network, I subscribe to a myriad of magazines and newsletters, blogs, financial and economic websites, various podcasts, and read over 100 books a year. In order to synthesize the information into an actionable investment thesis I deliberate internally (which sometimes includes talking to myself) then engage in discussions to vet the ideas and learn new ones.
13. Typically I’m compensated with a quarterly fee based on the assets I oversee but can also utilize a flat, hourly, or one time consulting fee when appropriate. All compensation is clearly disclosed, documented, and discussed in advance.

FA Hayek vs JM Keynes

Everything you need to know about economics.

13 Questions 4 your $ guy

Many financial planners are likable people, charismatic and well intentioned but what most investors fail to understand is that the typical stock broker, financial planner, and insurance agents are nothing more highly paid financial product pushers. Do not allow yourself to be seduced by a smooth talking salesman ever again. A decent adviser should have no problems answering the following questions and at the very least they will help you better understand the motivation, goals, and priorities of the investment representative you are working with or considering.

1. What specifically do you do for your clients and how do you do it. Give examples.
2. How do you select the clients you are willing work with? Why?
3. What type(s) of people do you work best with?
4. Who does not fit your service model?
5. How often, by what means, and for what reasons do you contact your clients?
6. How much time per week do you devote to meeting or talking with existing clients?
7. What are your hours of service? Are you available to talk/ meet on evenings and weekends? How often?
8. How many clients do you currently have and how many do you plan on accepting?
9. How much time per week do you spend prospecting for new clients?
10. What is your investment philosophy? Why?
11. How much time per week do you devote to investment research?
12. What are your plans for continuing education?
13. How much will you earn from our relationship this year and in the future? How are you compensated, and when will you be paid?

Ideally several other advisers would be interviewed as well to provide a basis for comparison (Here are my 13 Answers). If after contemplating all of the responses it reinforces the level of satisfaction with your current adviser thank them for a job well done. However if these questions exposed some uncertainty in your existing relationship, they can also be used as a starting point for developing a new one.



Sharing this information is my way of exposing ridiculous policies of and creating change in the financial services industry.

Learn more about who I am, what I do, and who I do it for.