Cody and Pasha discuss the vulnerabilities in the banking system, the recent bank runs, and the consequences for the economy.

In this episode, they discuss the complexities of rising interest rates, and the challenges of an increasingly indebted nation. But more importantly, given that no one can control external forces, Pasha and Cody discuss investor temperament, remaining rational in the face of fear, and how to capitalize on distress and volatility. 

Tune in as they share valuable advice on safeguarding your investments and thriving in a turbulent financial climate.

Here are some power takeaways from today’s conversation:

• Recent bank runs and what caused them

  
  



• The potential consequences of regional bank failures on the overall economy

  
  



• Investor temperament and how this is a critical factor in investor success 

  
  



• Maintaining rational decision making in the face of uncertainty and fear

  
  



• Hard assets as a safety net during economic uncertainty 

  
  



• Being conservatively aggressive and taking advantage of volatility

  
  

Episode Highlights:

[01:35 ] Bank Collapses and Financial Landscape

Cody and Pasha examine recent bank collapses, their effects on the financial landscape, and the impact of rising interest rates on banks' balance sheets. They discuss whether these banks are outliers or representatives of standard practices. They also go over the consequences of Federal Reserve bailouts.

[18:23 ] Rising Interest Rates and Debt Challenges

The topic turns to the possibility of the U.S. facing challenges similar to Japan's. Increasing interest rates cause significant issues. As countries become more indebted, handling high-interest rates becomes harder. Rapidly rising interest rates further complicate market adjustments.

[37:53 ] Emotional Management and Investment Strategies

Routines and reflection help with managing emotions and making informed decisions. Stay calm, rational, and focused despite negative news or external events. Blocking out negativity without ignoring reality prevents fear and greed from becoming the main drivers of your decision-making.

[41:13 ] Seizing Opportunities in Uncertainty

In uncertain times, opportunities arise. The hosts promote a “conservatively aggressive” approach: utilizing real estate resources, raising funds, and identifying market prospects. They’re optimistic about the real estate market until 2024 and seek “spot distress” situations.

[55:20 ] Market Expectations and Focus

The conversation concludes by acknowledging that the current market differs from the 2006-2008 financial crisis, but good opportunities still exist. They emphasize maintaining the right mindset, executing business plans, and avoiding distractions. Instead of relying on hope, they advise making data-driven decisions and considering potential setbacks.

Resources Mentioned:

Fed Funds Futures

The Wall Street Journal: Commercial Property Debt Creates More Bank Worries