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Real Life Planning Podcast Episode 12: What To Do When Things Move In The Wrong Direction with Bill Kan

Financial Planning

In Episode 12, Bill Kan, CFA®, CFP®, shares strategies to weather market volatility.  He also discusses how being mentally prepared during a bear market can optimize returns in the long run. Listen through to hear how science helps Bill create interesting flavors with his bread-making hobby.

“The most successful investors are those who figure out what's right for them and stick to it.  That starts with doing something sensible as opposed to being very speculative.” - Bill Kan

This week on Real Life Planning Podcast, Cynthia and Bill cover:


When your investment portfolio heads in the wrong direction [00:02:48]


Understanding risk capacity [00:09:27]


How your emergency cash fund can be your unsung hero  [00:19:00]


Bill’s take on today’s market volatility [00:21:32]


How you can prepare for the next 12 to 18 months [00:27:32]


Bill’s love of breadmaking (with the help of science) [00:30:04]

Takeaway Quotes

“Being prepared would be the best thing to do. ” - Bill Kan

“Sometimes what we don't do is as important as what we do.” - Cynthia Meyer

“As an investor, you got to do the Wayne Gretzky thing. You got to skate to where the puck will be.” - Bill Kan

Connect with Bill Kan

Connect with Cynthia Meyer

About the Real Life Planning Podcast

Host Cynthia Meyer welcomes fascinating guests to share real life stories of how they are realizing their financial potential. Each episode explores practical, realistic steps to create results.

Transcript - Real Life Planning Podcast - Episode 12

[00:00:06] Cynthia: Hello friends. I'm Cynthia Meyer with Real Life Planning and this is the Real Life Planning podcast. And today I'm really excited to talk to Bill Kan with Candent Capital. Bill and I are in the same mastermind or coaching circle together and we've been working together once a week over the past, almost three years now, right, Bill? 

[00:00:26] Bill: I think so, yeah. 

[00:00:27] Cynthia: And it's been a really beneficial group for both of us. I'm really happy to introduce you to him today and let's start off, Bill. Tell us a little about what's important to know about you? 

[00:00:40] Bill: Oh, wow. Thanks Cynthia for having me. It should be fun. I'm very excited about doing this.

What should people know about me? My background, in terms of becoming an advisor it's different from most advisors, in that I'm a career changer by not really. I have been in finance and economics from a whole career for about 30 years now. And I guess what really differentiates me is not just the time there, but I spent basically 20 years on the institutional side. I had the distinct opportunity of having been a desk economist covering the bond market. And then my bond friends thought I went to the dark side when I crossed over became an investment strategist doing small cap stocks for about seven years.

And then had the opportunity to transform myself again where I'd covered the emerging market equities. I joke and say, "Gee, I'm always following the Madonna plan." Every so often, she would remake herself and has decent success doing that.

So, it was pretty cool to be able to see different markets. While doing small caps, we also launched research reports on private equity. So it's unique in that I got to actually see firsthand, and be involved in many different markets during my research advisory career.

I bring that to the table and have my share of stories to share. Hope some are fun. Some are not so fun. But you know, lots of stories for sure. 

[00:02:01] Cynthia: I really hope we can dig into some of those today because as we're recording this, the markets in the U S are really volatile. The international markets are generally down, as well. The bond market is down. 

For many younger listeners, they may not have ever had significant capital in the investment markets in this way, in their adult lifetimes. So for those of us, and we don't have to say how old we are, but we've been at this for a while. So we've seen the dot com bust and the financial crisis of the great recession. The Covid recession in 2020 and lots of little ones in between. So we've buckled our seatbelts. But hopefully today you can share some guidance with folks about what they might be able to do during this period of volatility. What do you do when things aren't going the way that you want them to? 

[00:02:53] Bill: I think, first of all, expect that to happen. That's the natural course of events as an investor. , Although it felt that way for a few years, that it only goes up one direction. And it only goes to double digit levels. Look at history or look back in time. There are ups and downs. The most successful investors are those that figure out what's right for them and they stick to it. That starts with doing something sensible as opposed to be very speculative. If you want to be speculative, you can always buy a lottery ticket and see how that goes as an investment. It doesn't work well. One thing interesting about investing, at least in terms of the assets that most advisors deal with- stocks, bonds, real estate and so forth, is that they have a track record. You know how they work. They're regulated in a good way, because there's some protection with regulation. And the odds are actually in your favor. They will have ups and downs, but if you're there long enough, things will work out well for you. 

In contrast, that the odds of you playing the lottery ticket, odds are you're going to lose money. You go to Vegas, odds are you're going to lose money. 

Here, it's like a win-win situation if you have a long time horizon. So I'd rather play and choose that game and play it as best you can. 

[00:04:04] Cynthia: So staying at the table, right? Staying in your seat over a very long period of time.

I deal mostly with real estate investors in my practice. I think one of the reasons that people are able to stick with it for such a long period of time and realize the returns that come with that is because your property or properties are not marked to the market. Price discovery is hard, right? You have to get a property appraised or you have to sell it for a certain amount of money in order to know exactly what it's worth. Whereas with our 401k is for example, or a textbook brokerage accounts, we can literally watch price changes minute by minute. Second by second when the markets are open. 

Do you think that has a big psychological effect on people's ability to stay seated at the table over a long period of time?

[00:04:53] Bill: I think, yes. I think it's that it goes beyond psychological. Even in terms of the actual numbers, it'll show that they're less volatile. And to me, that's a fallacy. Just because you can't see, it doesn't mean that it's not there. I'll joke with my mom, she's elderly, and I would say, "Oh, that's salty." and she's like, " I don't taste it salty. Therefore it's not salty." "No, I know the salt content it's actually high. So be careful." And it's the same thing, right? Even if you don't see the volatility, it's there. We used to do that a lot when we launched a private equity. We researched report series. With private equity like real estate, you don't see transactions happen all the time. The general rule of thumb for the way people account for it is that if only when there's a transaction, you mark it up or down accordingly. If you think of it that way, if you don't do a transaction, it stays the same. There's no volatility. By a lot of people's eyes, they would say, "It's not risky. I didn't lose money." And in terms of some performance reports, you'll see for some private equity, their volatility is actually lower than it is because there's no mark. And it doesn't make any sense because I can say, "This is a smaller company. It doesn't trade. It's less liquid. They don't have strong market dominance." 

In the public market, public equity market, smaller micro-cap stocks. Usually those things have wild swings. So why if you take it private, does the valuation all of a sudden stop changing? Markets are actually very related and you have to do your homework and all that stuff. But don't fool yourself. If you don't see it happen, you may not be aware of it.

Imagine trying to sell something like the white desk behind you, Cynthia. All of a sudden you say, "I want to sell it today. Right now." What price would you get? And there's really no market for it. Is it whatever you want and you market at that price? Or you mark it at the price the first buyer gives you? 

[00:06:39] Cynthia: And people might market at the price they paid for it, even though I'm sure that's not what it would be worth if I were to sell it.

[00:06:44] Bill: Exactly. Imagine buying a used car, right? Once you own it, and then you sell it immediately, even if it's like a day old, the price has changed. Except for today, maybe it's still high but normal cases, 

[00:06:55] Cynthia: This is a weird period in history. It's because there aren't enough cars available for people that want to buy them. But.... 

[00:07:01] Bill: Yep. I would apply some of those rules of thumbs to keep yourself honest. Look at related markets, if you can. Are they changing, right? If you think about it for real estate, for example, if you see your neighbor sell their house for a lot more money than what they bought it at, you would say, "Oh! Things were up.' and you mark it up. But if there's no transaction. This market's down. What do you say? Do you say, "I'm going to lower it by 20% because somewhere else it's down 20% far away from me?" Or would you say, "I don't know what it is exactly." Which is probably the honest truth. But odds are it's down because things are being marked down elsewhere and the cost of financing like mortgage rates right now have shot up. Those are all things that affect prices. It's not a simple question. Not a simple answer, unfortunately. 

[00:07:47] Cynthia: Can we dig into volatility a little bit? Because I found in my years as a financial planner, that's often something that people don't fully dive into when they take a risk tolerance assessment when setting up an account or when getting started on a retirement projection or any kind of investment strategy. What we mean by volatility really is the variation in returns of an investment looking in the rear view mirror what has happened historically.

If there's any other simpler way that people could think about it, I would really like to hear the ways that you explain it to clients. Often investors focus on the upside number without fully understanding the implications of the downside numbers.

If something could have historically the possibility to go as high as say 35%, it probably has the possibility to go as low as minus 35% depending on the asset. What would you suggest that people do to think about those principles in terms of their implication to how they should remain invested?

[00:08:54] Bill: Ah, that's a great question. We talk about volatility, but for most people, they might use the term, risk. If you practice modern portfolio theory and you run these optimizations, what you're trying to do is maximize return and at the same time you try to minimize risk. And risk is standard deviation. People definitely always forget, standard deviation doesn't discriminate. It treats the up and the down the same. Most investors, they care about the up. They don't mind upside volatility. I'll take the upside. I'll take it all day. The downside is what you should really focus on. 

Depending on the practitioner or U.S. investor, a lot of times the focus is on the downside, right? In terms of sticking with it, how much can you stomach? Can you stomach the risk? I like to think of it also as your capacity to handle risks. Before we talked about staying invested, you want to be playing the game. The thing is not I want to play the game and be at the table. That's one thing, but I still need enough chips to stay at the table. Once I run out of chips, game over. Sometimes for investing, the strategy takes time. Day traders think in terms of minutes or days, but for long-term investors, it's not even a year but decades. Generations. You have to figure out how much can you risk and still be in the game? So if you already borrow lots of money to invest a margin call where something, false in price, and the bank, or the lender says, "Hey, you have to pony up now, otherwise, we're going to stop you." That's not good. So if you're a levered up or in real estate, If you're over levered, and all of a sudden you're not getting the cashflow to cover your debt payments, that's a problem. 

[00:10:29] Cynthia: Especially in the commercial space where a loan could get caught. 

[00:10:32] Bill: Yes, and we saw that in the great recession between commercial and residential, where people were betting that they can refinance and get a lower rate. Well thats one of the things I was going on there. Situations stopped happening. They couldn't handle the risk . The risk in that case was what, the ability to refinance at a lower rate. And for an investor, what they should really think about is trying to understand, for themselves or with the help of their advisor, the mechanics of what's going on. What does it take? It's not just like, "Oh, I have a bunch of money and or wealth and therefore I can play as long as I want it." No, not really because you bring in other things too, right? At least that's why I like to think about it. If you can make lots of money, you can pull in $5 million a year. But if you spend $6 million a year and you have all these risky investments going on, you have really little capacity for risk. One thing goes wrong, the house crumbles, and you can't really keep staying, playing the game.

What I would suggest is understand the concept of what's important to you and then also what do you have? Something always goes wrong. It's like a pothole on the road. What happens? Are you equipped to absorb it and keep rolling? Or you hit the pothole. You're going to get a flat tire and boom, you pull off the road, and that's it. You have to wait and spend time hoping for help and all that stuff. You really have to understand your situation and how you're stacked up. I even think our goals as a liability. There's something for myself. If I have a high priority goal, I can't risk it. If I take on too much risk and something goes bad, it's not only just losing money, I lost my goal. So can you handle that? 

[00:12:14] Cynthia: Ooh, I think that's really interesting from a paradigm point of view, is to think about funding your future retirement or your future college goal or whatever, as a contract that you make with yourself. You have to go and make a payment on it regularly. 

 How can people think about this negative feedback that they're getting right now in the past month or so, as we see the stock markets in the U.S. fall and around the world, how can they not get so tethered to the best day they ever had in their portfolio?

[00:12:46] Bill: Yeah. I guess the standard advice is don't look.

[00:12:50] Cynthia: Yeah. I looked at my accounts yesterday. I didn't feel that happy when I looked at them compared to say, three months ago. 

[00:12:56] Bill: Yeah, you know, that's easy to do. I think a lot of times, we fall to doing what's the easiest. What I like to remind people of is, what would we be expecting to get anyway? The highest point, right?

Let's say the last five years, if we're aiming to be up 5% a year, and we had this period where we had this big up and big down, and we're still up eight per year. We're still well ahead of the game.

[00:13:18] Cynthia: Anchoring to the goal instead of...

[00:13:20] Bill: Anchoring to the goal or anchored to the history. What were you expecting to get?

Because honestly, sometimes things happen really well, right? Like investments has worked out really well and you're super happy. And depending on the investment or the particular security or whatever, sometimes I'm actually really concerned and nervous when that happens when things do too well. Imagine, you buy an ETF or some mutual funds. And it does really well. I would ask myself, why did it do so well? Did they do something that they were not supposed to do? And if they did, they got lucky or whatever, and I'll take the luck but I don't want to count on it. In fact, you're adding risk to the portfolio that I did not agree to. I thought you're going to buy large cap stocks and I expect returns to be whatever 6% a year. For people that do some deeper work, like portfolio managers, and selecting securities and whatnot. They'll find out that a lot of active managers they do well because they go outside of their universe. . 

[00:14:20] Cynthia: So they make some tactical bets, if you will. To try and get excess return to their portfolio. 

[00:14:25] Bill: Yeah, and they do. They're skillful and they do that by going outside of their sandbox. In some cases, I may have agreed to that. You can go out 10% of the time. But if they overreach that, then flags go off and people should be aware of that. When things go too well, it's like, why did that happen? Is a sustainable? 

And even right now, I'm thinking about calling the current period, the Great Deflation. Things were great and these companies were super strong. But if you think about what was built into the price, it was very high expectations. When I was an analyst, we used to joke and say, "This is price for perfection." When perfection or the environment changes, you can't sustain that perfection anymore and the prices will come down. So right now, feds raising interest rates, inflation is running and everyone's agreeing that the fed is more and more behind. So they're going to have to be more aggressive. So the risk of inflation is higher. Companies are announcing, like one social media company a month said, "We are good." And now recently in their earnings report saying, "Well, things things have changed rapidly in the last month." 

[00:15:31] Cynthia: We're seeing a lot of that especially on the consumer facing side. Companies are pulling back on earnings expectations.

[00:15:38] Bill: Exactly. So you have a change in expectations. That perfect picture that we all painted, at least that was baked into the price, is no longer true. And that's in a sense of risk now. We don't know exactly what's going to happen. People are selling. The prices are being deflated. But then, as an investor, you might get frustrated, and your anchored to that. At the same time, I talk to some folks and say," We're also at a time where people are throwing the baby with the bath water type of situation. Can we buy D companies that will last the test of time? And, yeah, in a sense, 

[00:16:13] Cynthia: And get them little bit cheaper than we could have 6 months ago..

[00:16:16] Bill: Yeah, and I expect them to last and I expect them to grow. We'll ride it. And hopefully as a long-term investor, you're in a position, the resources to do this. And... 

[00:16:27] Cynthia: Well, it's a wonderful period in history, right? For those people who have cash sitting on the sidelines, in general, is to think about what to go shopping for and when and how much, depending on how long people think this is going to last.

But just in general, without talking about any specific opportunities in this market, although I'm curious as to what you think about where the opportunities are, what is that quote from Warren Buffet? I think, be fearful when people are greedy and be greedy when people are fearful. 

[00:16:57] Bill: Yup. 

[00:16:58] Cynthia: Is to think about where can you buy quality assets as an investor? And that could be buying individual stocks. Or for somebody who was just getting started or has smaller amounts to invest, it could just be picking up the mutual funds or ETFs that you like. And maybe making that IRA contribution early, so you can get a little bit more in the market at the right time. Now in this period of my life, I personally don't worry about it very much, but I'm mindful of the fact that clients are worried about it a lot. There's so much financial theater. I listen to Bloomberg in the car. You turn on the TV and everybody's trying to get attention on the latest, the latest disaster, if you will. But it's like the weather, right? There's always good and bad.

[00:17:42] Bill: Yup. Yup. I think one thing I like to remind people of is that, especially in the media, fear sells. Misery sells. 

[00:17:49] Cynthia: Which is really annoying, right? 

[00:17:52] Bill: Which is really annoying, really disappointing and I think it's a disservice to people because you're not presenting both sides of the picture. There are some real problems. I totally admit that. But there's also the other side too. I think for a lot of people, it's a difficult time. It's a horrible time especially if you said to yourself, "I'm retiring this year." All of a sudden, your portfolio lost 20%. It's like, "Whoa!"

[00:18:14] Cynthia: Maybe now, you might have to change your idea. Yeah. 

[00:18:18] Bill: And so the question is, how are you positioned? Can you handle it? Did you give yourself that cushion? If you are living paycheck to paycheck, there's no room for error. In this case, if you're about to retire and you're still like that, the environment has changed and you're banking on that peak number from like end of last year, you didn't have that cushion. And unfortunately now, we're stress testing it. Ideally, we prepare ourselves and our clients to be able to handle these situations. It's like having a shock absorber in your car and the springs. If you didn't have that, the ride would be so hard, it would be horrible. But sometimes you can go faster when you're like, so lean and mean. Just like our supply chain, right? 

[00:19:01] Cynthia: It would be nice if I went a little bit faster right now. Tamp down some of this inflation. That's why cash is in your emergency fund. Or your business cash reserves, right? Even though sometimes it can be frustrating to keep this pot of cash on the sidelines, and for some people that just could be a couple of thousand dollars and for some people that could be a hundred thousand dollars that they're keeping on the sidelines. Knowing that they have a way to pay bills while the markets work themselves out. 

[00:19:28] Bill: Yup. 

[00:19:29] Cynthia: Or if you're a real estate investor and you hoped to sell a property at a certain price and that's not available right now- to be able to wait for that.

[00:19:38] Bill: Yeah. One of the lessons I keep thinking about, especially in bad times, cash is king. Especially like real estate, or let's say you borrow money on a regular basis for your business or personally. One of the things I worked on when I was a bond analyst, was working on helping the U.S. Treasury launch tips, treasury inflation protection securities. We used to joke because at the launch the interest was not that high. And so we used to joke saying that, " It's like buying flood insurance. The time to buy it when it's during a drought." 

[00:20:08] Cynthia: The rates are lower. 

[00:20:10] Bill: Rates are lower. They want to sell the stuff, but no one is there. So things are cheap. But right after a flood, things are super expensive. Same thing with borrowing, right? When you don't need the money, there's tons of people are willing to lend you money. But when you actually need it, that's when the lenders become really selective. If you're not like the preferred borrower. You have lots of cash. You have good income and it's nice and stable. They may not want to lend to you and that's a problem. I've seen it not just for people, to businesses, to public large public companies. I've even seen it for countries. Mexico went through that about 20, 30 years ago, right? The Tessa Bono crisis. It happens across the board. So when things are good, that's great. But when things are not so good, you better prepare and think ahead and make sure that you're rock solid. We talk about money in this case, run emergency reserves. A more aggressive way of thinking about it is, can you raise the cash if you need it? Even if you're fully invested, can you sell something quickly to raise the cash? 

[00:21:12] Cynthia: Or do you have a HELOC? On your home... 

[00:21:14] Bill: Do you have a HELOC? 

[00:21:15] Cynthia: Personal line of credit or something like that. 

[00:21:18] Bill: Yeah, exactly. And in a sense, you want to get those ducks lined up before you need them. Because when you actually need them, forget it, it's going to be a hard and time is going to be so tight and you're gonna be stressed out by other things, as well.

Be prepared would be the best thing to do. 

[00:21:33] Cynthia: Yeah. Good guidance. How do you think things are going to play out? 

[00:21:37] Bill: I think the longer we stay in this situation, the uglier is going to be. 

[00:21:41] Cynthia: By this situation, you are referring specifically to what? 

[00:21:44] Bill: Let's say inflation. I'm thinking play out with regard to the recent sell off in the market. I guess the economy. That's why I'm thinking about. I would say the longer that inflation is an issue, the longer the fed has to raise rates. Or the longer that inflation continues to accelerate, the uglier things will be. 

So if you think back at the start of the year, things were actually benign. Things changed for the fed in a few months, very quickly. The way I read the fed was that they know what they're good at and they know what they're not good at. They know that when things are slow, you're not so good at getting things to get going again. They know how to shut down inflation. They can do it today, if they wanted to. But the problem is, if they raise rates to shut down inflation, immediately, right? Like jamming on your brakes really fast, they're going... 

[00:22:32] Cynthia: To hit the windshield. 

[00:22:34] Bill: Hit the windshield. And that's the risk that they run with recession and also taking the unemployment rate back from 3.6% now back up to four or 5%. 

[00:22:44] Cynthia: Which is by the way, the unemployment rates today is I think, the lowest that it's been in our lifetime. 

[00:22:51] Bill: I think so. Yeah. That was really impressive. Then fed chair, Jerome Powell, keeps mentioning this stat that for every person looking for a job there are about 1.7 job openings. Things are tight. Maybe things are changing as we speak. There's some companies that have already announced changes. So even for that, in terms to being prepared, don't think that the.... 

[00:23:11] Cynthia: The job market, it goes in cycles, right? 

[00:23:13] Bill: It goes in cycles.

[00:23:14] Cynthia: We have a period now where it's a great time to change careers or find a job, a new job. It's a wonderful time right now, where people who are on the edges of the employment universe, who were underemployed are now fully employed. Or who may be, had a hard time finding employment or now finding it easier to get a job. But that goes in cycles too, just like the business cycle. 

[00:23:34] Bill: If you see your stock price and your company is now 50, 60, 70, don't bank on this tightness to continue because the stock price is actually information. Maybe things will change in the future, but don't bank on this tightness to stay forever.

You don't want to be the last person standing in musical chairs. Right now we're playing this game. They're telling you to sit down, but a lot of people were still running around, like nothing's happening. Be careful. When the music stops, you better not be the last person.

[00:24:01] Cynthia: Where do you think the opportunities are right now? 

[00:24:05] Bill: Let's say things are getting bad, right? In terms of business grows slow. Rates are rising. Some companies...

[00:24:11] Cynthia: Right, but we're not in a recession yet. We're not currently in a recession. 

[00:24:15] Bill: No, we're not even currently in a recession.

[00:24:16] Cynthia: A little bit on skating on the bottom of a bear market, but not a recession. 

[00:24:20] Bill: As an investor, you got to do like the Wayne Gretzky thing. You got to skate to where the puck will be.

So right now we're not in a recession yet. But at the pace we're going, there's a risk of it. Even if we don't go there fully, it's highly possible. So three months ago I was thinking, odds are we're not going to go into recession. We're going to go to what I would call a growth recession or rolling recession. So growth recession is that it goes to like 2%. It's still rising. It's just so slow that it just feels miserable. It makes you feel like we're in a recession.

A rolling recession could be like usually when we talk about recession, it's about the economy. But if you look at certain sectors or industries, they can have certain cycles. Things can be out of sync where retailers could do well before now, they're really bad. So they're in a recession.

They are shrinking. But let's say tech companies are not yet. But that happens at a later time. So they're just going in different cycles. So rolling recessions, meaning a recession for different parts of the economy or different regions of the country. But right now, the more inflation accelerates and it could because supply constraints between supply chain, between the war and energy prices... 

[00:25:31] Cynthia: And housing. Sorry to interrupt you, but you know, housing is 40% of core CPI, right? The gap in household formations and available starter homes is almost 7 million households. That's not going to resolve itself anytime soon. 

[00:25:46] Bill: Housing is a really interesting one, in my opinion. And why? Because well, rising rates will slow down housing demand. Yes. Rising rates also makes the cost of building homes go up, which makes it more challenging. But at the same time, we haven't built any homes in like 10 years. 

[00:26:03] Cynthia: And all those people are staying in their rentals and that's driving up rent prices and competition for rent, which is great if you're like me. But on the other hand, that's harder for the person who needs to stay a renter. They need those people to go out and buy their own houses. That rising rent is what contributes so much to the core CPI. 

[00:26:25] Bill: Yeah. And so what the fed is doing doesn't help that because the supply is not going to increase. So we have, arguably, a very tight housing market that's going to stay tight.  Housing is very interesting in that way. It's very specialized, unique market and you need to build. And it's not like you can build things- it takes a day to turn it around. I'm in San Francisco and to build anything, in fact, you can't build anything really. They won't give you a permit for it. In fact, it's hard to even build an expansion to your home because of the permitting process. That plus time and blah, blah, blah. The lack of supplies. Lack of trying to find a contractor. It's very challenging. So I'm sure it's different parts of the country. Housing is very unique in that way. Right now, we can supply higher rates or making supply difficult. To me, it's really important to do your homework. Work with professionals that do know, that have information or insights about things. 

[00:27:20] Cynthia: So what are you telling your clients right now in terms of broad themes of opportunity over say the next 12 to 18 months?

[00:27:28] Bill: Because I'm an economist by training, I say it depends. 

[00:27:32] Cynthia: That's a great answer. And then you can go fight with a bunch of other economists. 

[00:27:37] Bill: Each person's situation is different and it depends on your priorities and your situation. Sure. Have you levered? Well, odds are, that should be your key focus. Maybe you have a lot of borrowing, a lot of debt, right? The cost of debt is rising. 

[00:27:51] Cynthia: Either locking in a rate or paying down some of the debt. 

[00:27:54] Bill: Or in a sense, freeing up cashflow, right? Because cash is king now, or not yet. When it becomes that way, you don't have time to scramble. You've got to prepare for it. If you have a good cashflow and income, right? Or lots of cash sitting around. It's time to build up your shopping list and look for things that you would may or may not consider. In some ways, this is me being the rational investor where, "Oh, I want to buy a car or I can buy some investment." I might actually wait on the car, if I could. 

[00:28:25] Cynthia: Until prices come down or there's more wiggle room.

[00:28:29] Bill: Also, I like the idea of holding assets that will likely appreciate. I know that if I buy a car, the odds are, it will depreciate in value. So if I can get something, especially at a lower price and lower price means higher expected return, I want to focus on that and wait for the big purchase of the car later, if I could.

Of course, if you need a car to do your job, that's very different. Then the question is, how much do you want to spend on it? 

[00:28:55] Cynthia: Or the $5.70 that I saw in gas prices to put in the car.

[00:29:00] Bill: Exactly. And then things are even higher. It's crazy, right? And prioritizing. Knowing your resources. Knowing your obligations. So it's basically, before doing too much, step back, know your situation. Know what you can commit and then build your shopping list to the asset of choice or the debt reduction of choice and go from there. Try not to fall into the trap of the behavioral stuff and be like as cold, as robotic, as possible. So you can give yourself or work with someone that can give you an honest evaluation or analysis of where things stand. It's time to be honest, really. 

[00:29:40] Cynthia: We can't just be cheerleaders. We have to be clearheaded about what to do or what not to do. Sometimes what we don't do is as important as what we do. 

[00:29:48] Bill: Sometimes the best decision we make is the decision to not do anything. 

[00:29:52] Cynthia: What are you curious about right now, Bill?

[00:29:54] Bill: It runs the gamut, so I'm very intrigued by the market. The geopolitics. I'm worried about what Russia's doing with Ukraine. How that maps into say China and Taiwan and the geopolitical risks there, because we used to rely on Taiwan for a lot of chips.

But then at the same time, I was also intrigued yesterday when I was reading about the science of bread. I like to make bread, but I was just reviewing the science of how to manage things and to tweak the bread that you want to make. It's fun. It's an investment of sorts of of how to create flavors. 

[00:30:28] Cynthia: Oh this is an interesting topic. I want to hear more about, a different time, about your bread making hobby. That's very cool. 

[00:30:36] Bill: Hopefully I can get you a fresh sample. 

[00:30:38] Cynthia: Oh, what kind of bread you bake?

[00:30:41] Bill: Oh. Lately I've been playing around with this Scandinavian rye base bread. It's a bit dense. And I was actually inspired by, I forget the name of it, but you know how in the Grand Central Station, there was, I don't know still is, the section about Scandinavian food? So I had a wonderful open face salmon sandwich there using this type of bread. So that's been in my head for a few years now. 

[00:31:03] Cynthia: And so I think that's a wonderful that you're curious about bread amongst all the big thinking that you do about the things that impact your clients in the work that you do. The wonderful work that you do. Where can people find you if they want to talk more?

[00:31:18] Bill: The website is www.candentcap.com. I guess other way is just shoot me an email or call me. That's the easiest way to contact me. I try to respond quickly. You can also find me on LinkedIn and Facebook too, but primarily on LinkedIn @BillKan.

[00:31:35] Cynthia: Perfect. Bill, thank you so much for chatting with me. I really enjoyed our conversation and we will put some links to the resources in the show notes and also where you can find Bill online. So thanks very much. And I'll see you at our next mastermind. 

[00:31:49] Bill: Yep, absolutely. Okay. Take care. Bye bye. 

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