EP 72 - Greg Silberman Part 1 - Money Talks - Financial Learning Tips from a Chief Investment Officer

Money Talks - Financial Learning Tips from a Chief Investment Officer

Behavioral Finance is crucial in identifying and understanding why people make certain financial choices.

On today’s podcast, Steve Simonson introduces us to Greg Silberman, CIO of ACG Wealth. Greg is responsible for managing the firm's Global Investment Portfolio, as well as supervising the implementation of the company's Asset Management Strategies. Here are some key points on today’s episode:

• Greg’s origin story growing up in South Africa.

• How he started his professional career as a Chartered Accountant.

• The different kinds of clients they serve at ACG.

So listen to today’s episode to learn more about Behavioral Finance or the Psychology of Investors.

01:35 (Steve introduces today’s guest, Greg Silberman, CIO of ACG Wealth.)

03:39 (Greg talks about his origin story.)

05:53 (Greg talks about the kind of clients they serve at ACG.)

12:13 (Greg talks about his first job.)

16:36 (Greg shares his defining moment.)

Welcome to the Awesomers.com podcast. If you love to learn and if you're motivated to expand your mind and heck if you desire to break through those traditional paradigms and find your own version of success, you are in the right place. Awesomers around the world are on a journey to improve their lives and the lives of those around them. We believe in paying it forward and we fundamentally try to live up to the great Zig Ziglar quote where he said, "You can have everything in your life you want if you help enough other people get what they want." It doesn't matter where you came from. It only matters where you're going. My name is Steve Simonson and I hope that you will join me on this Awesomer journey.

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01:35 (Steve introduces today’s guest, Greg Silberman, CIO of ACG Wealth.)

Steve: You are listening to Awesomers.com episode number 72. And all you have to do is go to Awesomers.com/72 to get the show notes and details and perhaps any links we've discussed throughout today's episode. Now today is the first part of a three-part series with Greg Silberman. Greg is the CIO of ACG Wealth and as you'll find out later CIO in this case means Chief Investment Officer. He brings more than 16 years of market experience in Europe, Asia and North America. Greg is responsible for managing the firm's Global Investment Portfolio, as well as supervising the implementation of the company's Asset Management Strategies. Prior to joining ACG, Greg served as a Director of Alternative Investments at Wilmington Trust where he was responsible for managing more than, wait for it.... 2 billion in private equity hedge fund and other real estate assets and he was also instrumental in the launch of the successful alternative mutual fund. Just think about that for a minute, being responsible to manage billions of dollars of other people's money. By the way, if that was enough he also managed another 80 billion as a member of the research team and was helpful and instrumental in that process elsewhere. He was a Portfolio Manager Analyst and Product Developer for Perpetual Investments in Sydney, JPMorgan Chase in London and had a focus on structured derivative products. And we're going to get into hot derivative talk later on in this three-part series. Greg is also a Chartered Financial Analyst and a Chartered Accountant as well. He's got a lot of experience and we're lucky to have him to come and share a little bit of his knowledge about Financial Learning and Financial Acumen and you're gonna love today's episode. Let's jump right in now.

Hello again Awesomers, it’s Steve Simonson and I'm back again with another episode of the Awesomers.com podcast. Today we are joined by Greg Silberman. Greg, how are you?

Greg: Good morning to you Steve. It's now good afternoon in the East Coast. I am doing wonderful, thank you for asking.

Steve: Yes, glad to have you here and I've already done a read in of kind of your background and bio a little bit, but maybe you could tell us again where you live today, and you know kind of what takes up your time day to day?

03:39 (Greg talks about his origin story.)

Greg: Certainly, so I'm in Atlanta Georgia, been here for about 18 years now. I'm the Chief Investment Officer at ACG Wealth, which is just a lot of letters which really means that I have the luxury of sitting in my office and reading and thinking big thoughts. I have investment opportunities coming across my desk at a rate of knots that I can't even look at all of them. But I really have - I’m very lucky because I have the ability to search and learn all sorts of different things and speak to all sorts of different people as far as investing money is concerned. At ACG Wealth we run a number of different kinds of strategies for clients. We’ll do just simple stocks and bonds listed. We’ll do unlisted which is more like a private equity or venture-type investments all the way to real assets, mining and oil - mining - oil and gas, I beg your pardon, mining and minerals.

Steve: Fascinating! Definitely quite a number of areas that we’ll dive into. I suspect a little bit more as we go through this Authority episode, but I'm no linguist, but I'm picking up slightly different than the traditional Atlanta accent there Greg. How can you...

Greg: Yes. Well, as I say to everyone I meet, I'm from the real deep stuff. You can't get more South than where I'm from and that would be South Africa. I grew up in Johannesburg and that's where I had my schooling and then left South Africa in the early 90s. So a lot of history, a lot of lessons that I learned growing up during the apartheid era in South Africa.

Steve: I can only imagine. Well, that definitely that it would be the true deep south then I suppose. Yes. Atlanta seems south in the US, but in the world, no question South Africa is down there. So let me ask you this Greg. As you think about kind of investments and wealth and things like that, I know that you guys at ACG have dealt with a lot of money over there, what kind of clients do you typically service at ACG?

05:53 (Greg talks about the kind of clients they serve at ACG.)

Greg: Yes. It's a good question because it's not straightforward Steve. Look, most of our clients are in some shape, form or other individuals. There are the families or high net worth individuals or maybe just Millennials if you will who are just starting the capital formation process. So, we have a few institutional clients. There would be endowments, foundations and pensions, but really, by and large, we don't deal with those kinds of clients. The reason I differentiated for you is because people grow and their lifestyle changes and they move through different life events if you will. So, our larger clients would be very wealthy families. They've already generated their wealth. They were lucky enough to have a father or a grandfather who wasn't entrepreneurs, bought a business, probably bought a very large business and then had a very nice exit or liquidity event. That genre of clients really have generated wealth. They do not need to do speculative or engage in speculative investments or businesses for that matter. What they're really interested in is maintaining their lifestyle. So that's very much an income approach. They want to generate income of the corpus of the capital that they've accumulated and certainly protect their capital against erosion from inflation, you know any kind of sovereign concerns confiscation of assets which is really not an issue in the U.S., but certainly would be in other places that I've lived. Then you get other clients that we serve who are approaching retirement, have built up a nice nest egg for retirement and really crossing over from that working Monday through Friday to slowing down. And they really need to know do I have enough money to do that, what kind of lifestyle can I engage in doing that. Then you've got the youngsters who are in capital formation mode. They're working hard, they're trying to save, trying to build capital, but don't really have much of an income requirement because they can’t generate enough income for themselves at the moment.

Steve: Yes, fascinating. I do appreciate the delineation there because each of those groups have quite different objectives and I suppose that the strategies that you guys would consider or conceptualize for deployment would be quite different amongst those groups.

Greg: That is correct and I'll add in an additional wrinkle to that Steve and something that's really kind of close to my heart or what I find very interesting about my profession. Just because you are as an example a Millennial in capital formation mode, so you're trying to save, you know, you and I both know we've made many people who are horrible savers and we met many people who are great savers. So there's added layers to all of that not just to say somebody is in trying to build capital and can now save. Some people from a psychological perspective don't like to save, well don’t like to - you know, they want to spend what they make. So, there's all sorts of different layers and it's just not a clearly linear to say, okay you're XYZ age and your visual risk-return requirements.

Steve: Yes, fascinating. I definitely can identify with this idea that some of the folks out there are all about that saving, right and just every little dime goes into the big piggy bank in the sky wherever that may be and there are others who just have to have - I don’t know, like a voracious appetite for lifestyle and they have to have the bigger house, the bigger car, the bigger island, whatever it is. And I imagine that you guys would find probably dealing with those two types of individuals quite different as well.

Greg: Well that's entirely right, Steve. It's the most fascinating and I think somewhat of an underexplored subject is Behavioral Finance or the Psychology of Investors in my instance. How people behave towards money is absolutely intriguing all the time. I've seen billionaires who count pennies and I've seen people with not much means, just literally live on a day to day basis. There is a lot around behavioral psychology we are shaped, believe it or not, well you would believe it from a very early age about how we have a relationship with money, and how we deal with money. And a lot of that comes from things we hear, things we see, our upbringing, our parents, people close to us. They really shape our psychology around wealth.

Steve: Yes. I definitely agree with that premise and so many of us are influenced by these factors that may seem fairly innocuous as you go through life, right? The other things of course you've always heard I'm sure many people in the audience and you in particular would have heard. You know, anybody who grew up during the depression man, they have a a rigid perspective about money, but all of the different influences as you go are probably going to have that impact. I know again for some people it's remarkable to me how much ahead of the curve of money they like to spend. I've known sales people for example that if they weren't like up against pressure to make their next sale then they would just kind of be lazy and just like “Yes, I don't have any bills coming up, I don't have to work as hard”. But other guys would be just constantly churning and kind of like the squirrels with the nuts in the tree all year round just waiting for the rainy day. I think you're right that the Behavioral Psychology has more to be explored. So Greg, let me ask you this. You mentioned you're from Johannesburg, is that where you're born by the way?

Greg: Yes.

Steve: What an amazing area. What was your first job when you were coming up? Either out of university or what I like to think of as a proper job where you had somebody that you reported to and kind of got your experience?

12:13 (Greg talks about his first job.)

Greg: Yes. So Steve, the way it worked in South Africa, and I think it works this way mostly in the ex British Colonies and England itself. So, my first qualification was as a Chartered Accountant, which is otherwise known as a CPA here in the United States. And the way a Chartered Accountant work there is it was essentially four years of college education. Then you had to go and essentially apprentice or traineeship if you will in public auditing with a public auditing firm. At that time, I was with a firm called Kissel Feinstein, nice Jewish firm was part of the global empire of Grant Thornton. So, my first job out of college was with Grant Thornton. It was a three year traineeship as an audit clerk essentially and let me tell you, I hated every single minute of that job, but notwithstanding it's probably the best basis and education I have received bar none looking back now.

Steve: Amazing. I used to use Grant Thornton to audit a company I used to own. It's a fascinating small world. Now, it's funny as much as I'd like to dive into hot audit talk here on the podcast, but tell me about you know what about that experience? Obviously you found it to be largely additive to your skill set, but you didn't like it. What part of it didn't you like? I'm curious.

Greg: Well, there was no room for creativity in auditing and these were the days -- and gosh, I might be dating. Yes, we use computers at the time, but a lot of our audit files were manual paper files right. So, you could only use a pencil when you did auditing, so you could rub out any mistakes. And then we had this reference system that I can't even remember, but there was a green pen and a red pen and the red pin was like you were referencing to in the green paper you were referencing from. And it was just - it was I felt like I was checking somebody's homework and 99% of the time the homework was fine and I wasn't going to find anything, any smoking gun, not where I was looking. So, you know it was in very detail oriented in the numbers all the time and not much room for creativity. Obviously, there are changes as you move on and you grow a little bit into it, but you know auditing is - I don’t know, it just didn’t have that level of creativity that I was looking for essentially.

Steve: Well, I can certainly understand there's not a lot of audit firms running around talking about “Hey, we're the most creative audit firm out there”, you almost - you really do want homework checkers I think it's so many ways, so that obviously didn't resonate with you. We're going to take a quick break. When we come back, I'd love to talk about just a couple of the defining moments and things that you've experienced along the way because as you've become an expert in investment so many of the entrepreneurs in the audience out there listening we don't fully appreciate or understand that world. I'm curious at how you got onto that road from the auditing and we're going to do that right after this break.

Steve: Hey everybody Steve Simonson here. And I wanted to introduce you - one of my heroes in this Awesomer Review Moment. Hollowinder left us this review, “Awesomers is awesome. Wow! In the first episode, Steve promised to bring at least 180 more, but just this first show could have counted for more than a dozen. It's a long first episode, but worth every minute. Just made it to the top of my playlist, can't wait for more.” And I just want to say a big shoutout and thank you to Hollowinder for leaving that excellent review. It made my day for sure and we look forward to seeing your review very soon.

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Steve: Okay we're back everybody, Steve Simonson joined today by Greg Silberman and he's talking a little bit about his past right before the break there. But I wanted to ask Greg what defining moment have you had kind of maybe between that auditing experience you had and today that kind of set you on the road to where you've become such an investment professional?

16:36 (Greg shares his defining moment.)

Greg: Well let me back up a second if I may Steven and reframe your question. So, I'd like to - bear with me for minute as I tell a quick story. So, I grew up in South Africa. I guess I was a child of the 80s and we had just come out of a very large gold bull market in the 60s and 70s and the early 80s. So South Africa was quite strong economically coming into the 80s and there was by and large by virtue of the amount of gold that South Africa was endowed with. I remember as a kid my mother took me to the Johannesburg Stock Exchange one day and I must have been about just like 12, 13 years old and they had this little tour where you tour around. They show you different miner and then mines and whatever and then I show you this presentation. The presentation is probably the most indoctrinated presentation you’ll ever come across. The old South African flag flying in the wind there and there's the springbok, which is the national buck jumping up and down and they pour in gold and just from sea to sea what a wealthy country as well. It was great, it was interesting. And then Steve, the show finishes and with the old projector so the projector shuts down and the window, the curtain and it's a very large from one side to the other curtain start rolling back. As its rolling back there beneath you I saw what was then the open outcry system on the Johannesburg Stock Exchange floor. It didn't take very long to see some whoops and cheers and papers flying up into the air and you see the guys marking prices on the chalkboard and I was just blown away. It was like I just arrived somewhere and I don't know where I was and just drawn in totally to that atmosphere and for whatever reason it was I decided I wanted to be a part of that excitement or whatever it was and there were numbers and I enjoyed numbers. So that's what kind of got me on the road so to speak and so from a very early age I knew what I wanted to do. I didn't really know how to get it done. And I had some good coaches and mentors along the way that did coach me along the way. And so I went the CA route, the Chartered Accountant route and did that. And as I said to you before, it wasn't my finest hour but certainly learned the language of business which is Balance Sheets and Income Statements. And then after that, now we're going to the mid 90s, a lot of my colleagues were leaving South Africa in droves. We had just emerged from apartheid. We had just had “open and free” - and I'm saying that in quotation marks, the elections, I assume they were free to a degree. Nelson Mandela was released from jail. He had just become the new first black president of South Africa. It was actually a wonderful time, great to be there in person and to behold that. The problem that South Africa was experiencing and I am digressing a little bit was that so much weaponry had been pumped into the country by the Russians and by others to try and liberate the country. Now, you had a situation where there was no political issue, but you had a lot of guns on the ground in the arms of people who didn't have a lot of wealth. And so there was a recipe for disaster. I saw it, a lot of my friends saw it and we were looking for greener pastures. Those greener pastures took me to London because London was an easy hopping off point from South Africa. There were still some reciprocal work visa programs that we could take avail ourselves to. When I got to London things were booming, things were really going great, and I was lucky enough to find a position at JPMorgan Chase working in their swaps derivative unit. I was essentially the computer junkie. I was a computer nerd and the guys would come to me and they would say “Greg, here we're just doing this equity swap or this equity derivative, these are the counterparties. We need you to code it up into the system,” which was essentially Excel and Linux-based and I did that. And again, you know when you see things from the bottom up, you get to learn the business. And all of a sudden that to me became the first sign of the investment business that I became aware of and I realized the extent of it and how big it was and what was actually happening and again that just drew me in further and further into the business.

Steve: Well I always enjoy getting a real deep look at somebody like Greg and their experience. I hope you enjoyed this first part of the three-part series. We're breaking into three pieces partly because we want to make sure that you guys can consume the amount of content we're producing in Awesomers.com in an almost like a day to day basis. In the past, we've been producing as much as an hour or more of daily content and we just know that the factory is producing more than the consumers can consume. And so we're trying to balance that and make sure that we match the time that you have with the time that it requires for getting through one podcast. By the way, on a selfish note, my time has been completely smashed in July, August, and September keeping up with a daily podcast. So, I hope that this serves the audience well, but I can tell you it will also help my life and not drive me insane. Turns out working for free and driving yourself insane not the best combination. So Awesomers out there, if you're listening, again this has been episode 72, go to Awesomers.com/72. You can see the show notes and details there and don't hesitate to get out there and leave us a review. Awesomers, this is a great time to run over to iTunes or Google Play or Stitcher, Spotify wherever your favorite podcast platform is and leave us a review. Those five-star reviews are like fuel in the tank for myself and the team and we'd love to hear from you, thanks so much for that generous effort.