Invictus Year In Review Made Simple

Our guest for today is Anthony Vicino and Dan Kreuger. Both will be taking turns going over 2020, just a year in review. This episode is coming up on the one-year anniversary of this podcast. Both agree that without a guest to interview this would be a great time to talk about all the things that have occurred. 

Let’s dive right in and get twice as much from Anthony and Dan!

[00:01 – 09:27] Opening Segment 

• We Anthony Vicino and Dan Kreuger introduce themselves
• Starting off with two original bad investing advice

[09:28 – 20:17] Using The First Deal, Duluth!

• Anthony and Dan talk about their first deal in January 2020
• Details on Duluth, and the 2ns deal Grandave Goodrich

[20:18 – 27:02] The Asymmetric Risk-Reward Ratio

• Limited information on an upcoming 3rd deal that is in the Goldilock Zone
• Discovering that there are Little guy deals to be made, the Holly, T.I.C. deal 

[27:03 – 34:49] Closing Segment

• Establishing strategic partnerships with local powerhouse brokerage 
• Final thoughts
• Anthony and Dan's book recommendations:

Mastering the Market Cycle

The Algebra of Happiness

Tweetable Quotes:

“find your niche and stick to it” – Dan Kreuger

“You know, luck is when preparation meets opportunity, and if you're preparing in the right ways, the opportunities are going to present themselves. But it's up to you to figure out how you're going to exploit that opportunity or maximize it.” – Anthony Vicino

"So while we do have a niche that we focus on, we're very cognizant of what's going on from a high level, the macroeconomic picture and then the macroeconomic picture." - Dan Kreuger

"for the deal to still be hitting our projections and coming in line with that. That is one, a testament to the conservative underwriting nature" - Anthony Vicino

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Transcript

Invictus Year In Review Made Simple

Anthony Vicino: [00:00:14] Hello and welcome to Multifamily Investing Made Simple. This is the podcast where we take the complexity out of real estate investing so that you can take action today on your host Anthony Justino of Invictus Capital, joined, as always, by Dan. I better shut my window now. Crigger, how are you going to

Dan Kreuger: [00:00:31] Do good that's what they call me window shutter,

Anthony Vicino: [00:00:33] The window shutter.

Dan Kreuger: [00:00:35] And that's kind of cool, right?

Anthony Vicino: [00:00:38] You know, for the listeners at home, Dan is doing you a solid by shutting that window because he lives pretty much right above a firehouse. And every other minute it sounds like a fire truck is gone by.

Dan Kreuger: [00:00:50] Yeah, and there was some construction yesterday, so I would not be surprised if there are some jackhammers soon. Jack would love

Anthony Vicino: [00:00:58] Some beeping, all sorts of things. But today I'm very excited because this is the first time in almost a year since before we started in the first 15 episodes where we don't have a guest, we don't have a guest. It's just you and me going flying solo right now. So we have to rely on ourselves to somehow generate some meaningful content and conversation that's entertaining and educational. It's a tall order. I don't know if we're up for it, man,

Dan Kreuger: [00:01:26] So I can't just nap through this episode. Like, usually

Anthony Vicino: [00:01:28] I'm going to need you to present more than usual this time. Yeah, because it's just you and me. We don't have a guest. It's just, you know, going back to the good old days, that was just the good old boys doing it. So so lets I thought this would be a good episode because it is just the two of us that we just do a year in review. We talk about twenty, talk about where Invictus is and like what we've seen in the market, what we're looking forward to in the next year. It's been a crazy, crazy year. We're almost coming up probably by the time this episode goes live. Actually, this is coming up on the one-year anniversary of this podcast. So it just seemed like an apropos opportunity to talk about all the things that have occurred. But I think before we get there, we should probably do our best investing advice of the week. And I don't I we didn't discuss this beforehand. I don't know if you have one off the top of your head, but if not, I actually have one that I've been thinking about.

Dan Kreuger: [00:02:25] I do have one. OK, we can rock, paper, scissors, it

Anthony Vicino: [00:02:29] Sounds good, let's do it. Do we just

Dan Kreuger: [00:02:32] Do we need to make our listeners listen? Yeah.

Anthony Vicino: [00:02:35] Do we talk? We talk it out and then just tell them who won and lost. How about this? How about you tell us your about investing advice and then I'll tell you my bad investing advice and then a two for a twofer. That's yeah. That's, that's what you get. Ladies and gentlemen, when you don't get guests on the podcast, you get twice as much of us.

Dan Kreuger: [00:02:55] Well, hopefully, it's not the same one because I feel like it might be bad investing. The tip of the week for me is going to be to find your niche and stick to it. Typically, that sounds like pretty good advice, we kind of do that we we have our niche that we kind of stick to. However, we and that's the reason I'm bringing this one up now, is because I think it's pretty topical to what we're going to chat about here. We're always ready to pivot if and when the paradigm changes or the market environment changes. So while we do have a niche that we focus on, we're very cognizant of what's going on from a high level, the macroeconomic picture and then the macroeconomic picture. And if there needs to be a pivot to our core strategy, we're always ready to do that. So bad investing tip of the week parlayed into a good tip is. Finally didn't stick to it, but. Are you ready to pivot?

Anthony Vicino: [00:03:55] Mm-hmm. I think that's the really recurring message of 2020 was to be ready to pivot and adapt. Darwin's falsely attributed the quote that it's not the strongest of the species that survives. It's not even the fittest. It's the one that's most able to adapt. And I think we saw that 20, 20 was a perfect indicator of that. But I think to your point, what you're really talking about here isn't so much like that, Nicias, are bad because it's like saying I'm a football player. You get really good at playing football. In our case, our football is multifamily assets. But sometimes you have to change up the playbook. You have to pull out the different, I don't know, the flea-flicker and the Hail Mary and the Statue of Liberty. And these are real plays that dad has no context for it. Neither do I, because I don't play football.

Dan Kreuger: [00:04:46] I recognize one. I thought you were just making stuff up, you know?

Anthony Vicino: [00:04:50] So I think I think to the caveat I would put there is like, choose your game. If that's football, play football. If it's baseball, play baseball. And that's if you're in if you're in multifamily, even multifamily, if you're in mobile home parks, be in mobile home parks, at least until you have established enough competency and track record and foundational skills in that thing to be able to pivot to an entirely different game. But within the game, you constantly have to be reevaluating the strategy you're deploying. You can't just assume that the same game plan is going to work this time because it worked last time. And when twenty, twenty, and covid like we went to full quarantine, it became very evident that the playing field had shifted and that if we wanted to survive or even thrive, that we were going to have to rethink some strategies. And so I think that's actually some really good advice there. Dan, good job. And it wasn't the one I was going to come with. So we are going to, in fact, get two pieces of original bad investing advice. Mine is right now we're in the middle of a capital raise and we have a project. And one of the questions that we get sometimes it's not even a question. Its way it's a way of evaluating different deals is based on the preferred return. So my bad investing advice is you should always go with the deal that has the highest preferred return.

Anthony Vicino: [00:06:13] What do you think was reasonable, sounds reasonable. Why I don't agree with it, but it has come up a couple of times because let's say I think by the time this episode airs, it will be wrapped up at the Capitol is I don't think we're going to run afoul of any kind of like a general solicitation or anything like that. So one of the things is interesting, though, when when you're looking at two deals, if you see one, let's say, offering a seven percent profit and another one offering an eight percent pref. They're so close that functionally one's not significantly better than the other in the grand scheme of things, without taking into account the downstream underwriting and projections that were used in getting to those numbers. It's almost splitting hairs at that point. But what really matters is diving into what were the assumptions that these operators made when they came to these numbers, because it's very easy, actually, just to project and say a 10 percent preferred return and just have the assumption that you're going to make it all up on the very, very back end of the deal. So I prefer to turn it's a great way of showing skin in the game, an alignment of interest between the GPS and LPs. But it's not really the metric that I use or even consider very highly when choosing between two deals.

Dan Kreuger: [00:07:31] Yeah, I think really the bottom line is if you're looking at a deal that's going to net you 20 percent on an annual basis over the next five years, the difference between a five, six, seven, eight percent profit is kind of negligible. When it's all said and done with, you're still going to be making twenty-one percent. So, you know, it just kind of comes down to at what point is the start to take their cut. But the, you know, about the same amount of dollars are going to be ended up in your pocket. So it really is just kind of a packaging type. Exactly. For a deal. It's a marketing component that looks good and it sounds good. And I think it's always important to have a preferred return in there because it does put the investor first. But just so people know, if you see something with the five or six or seven or eight, you know, you might assume that the higher number is better. But if you do the math on the various ways that could play out, given different preferred returns net, that's not really going to change the economics of the deal too much.

Anthony Vicino: [00:08:30] That's that's exactly right. And I think right now, the market average that we're seeing is between a six and an eight percent preferred return. If you're in that ballpark, you've got a pretty competitive deal one way or the other. So I wouldn't I wouldn't lose sleep over the fact that one's offering six and the other is offering a seven. In the grand scheme, it's all going to be more or less shake out the same. Really, the function of the preferred return is just to put your interests ahead of the game and show that that you're first in line to get your cut of the pie. Mm-hmm. All right. So there are two bad investing advisers. That's a lot of bad investing advice. So let's talk about the year in review. Let's start at the very beginning. We actually closed our first deal together. I did Victus in twenty-twenty January, twenty-twenty on a project that we lovingly referred to as Delyth Duluth's. And I said I've been saying that that's how I say it. But maybe that's not actually how we said.

Dan Kreuger: [00:09:28] I think technically it's Duluth. Duluth, OK, do luth. But I mean, yeah, it's worth noting this was the first indication that Anthony and I brought the market together. We both were quite active in the space prior to this and had done many deals. But this was our first collaborative project, January of twenty twenty. In retrospect. Now everybody can can know that that is a very interesting time to be closing the deal, especially the deal that we closed. Yeah. So, yeah, it was a 32 unit apartment complex located in St. Paul. So don't be fooled by the name Duluth. It was a property on Duluth Street, which is what we refer to it as Duluth. But yeah. Thirty-two-unit apartment complex. We bought it for two point four million dollars, which works out to be about seventy-five grand per door, which in our market is a very good price. So you're under so

Anthony Vicino: [00:10:28] You're underselling that. You're underselling that because we saw some data from a brokerage assembled that at year-end where they assembled all the multifamily assets that are traded in the last year and that one traded at the lowest second to the lowest basis of any multifamily asset in the Twin Cities. So, kaboom. How's that for negotiating?

Dan Kreuger: [00:10:50] The lowballs wasn't even a lowball, really. I mean, it's just now it's, you know what it was like. Yeah. I mean, there was a lot of work to be done. It was a deep Value-Add deal where the value adds came from the rents being, if I remember correctly, on average, over two hundred dollars below market. And the tenant base was not the greatest. The prior owners were basically leasing to anybody who could follow them. There wasn't much going on in the way of background checks or credit checks. And so the clientele that was in place was not the greatest. We knew that going into it. And that was part of the business plan with this one was to upgrade the tenant base, upgrade the units and get those rents up to par. So as you can infer from the timing of this, you know, trying to go through that process in March, April, May, June, and July and pretty much all of twenty after February was a lot different than it had been in any time in history prior. We have to go ahead.

Anthony Vicino: [00:11:57] I would you go, you go, you're on a roll there.

Dan Kreuger: [00:12:00] Yeah, I was just going to say, you know, there were a moratorium's, you know, there were there was just a general consensus out in the markets that everybody was just going to stop paying rent. Never really happened that way. But the whole eviction moratorium type thing was potentially a big, big headwind to us. Not that we were planning on evicting a bunch of people. Never late to do that. I've honestly only evicted one person since I've been in this business. Don't really want to do it anymore. But it didn't really help the story with having a rough tenant base in place that we needed to reposition. So was definitely a different paradigm in March than it was in January when we took it over.

Anthony Vicino: [00:12:47] Definitely. I think one of the things we can share throughout this episode is some of the lessons learned. And Duluth was a it was a great example of we learned a lesson. Well, we didn't get burned or anything like that. It was a great deal that's been delivering as expected, which is remarkable considering the world kind of went into the toilet there for a bit for the deal to still be hitting our projections and coming in line with that. That is one, a testament to the conservative underwriting nature and then to, you know, the fact that we got through relatively unscathed in the grand scheme of things like the all the terrible things that could have happened in the grand scheme never really materialized. But through that experience, you know, we started having questions about is that the same business model that we want to deploy again with all the still same unknown variables swirling around the air, the eviction moratorium and the cost of labor and construction equipment like just skyrocketing, not being able to find a refrigerator to save your life like all these things contributed. And so, like the lesson that we learned there was, OK, it's time to pivot and to change up the playbook a little bit here, because it's a great playbook. It wins championships and we're eager to get back to it. But until we have more clarity on what the long term viability in the market is and our ability to go in there and execute the game plan, we made a conscious shift to our second asset that we acquired almost 11 months later in November of twenty twenty, which was lovingly referred to as Granddad Goodrich. So let's walk through that door a little bit.

Dan Kreuger: [00:14:26] Yeah. And real quick, slow, humblebrag. We can do this on your behalf to Anthony. I wonder how many groups could have closed on a deep value Adiele in January and still hit their pro forma numbers.

Anthony Vicino: [00:14:39] That's a great question, honestly, like it's one thing like we we joke around about how everybody always says we're conservative, underwriter's, like all operators say that. But it's really hard to vet that out because the market's been so good in assuming everything stays decent, then it's hard to be too wrong in your projections. But 20, 20 was a perfect opportunity for us to see, like just for us at least, because we closed that deal and that we were supposed to be doing the heart of the work when everything kind of shut down. It really gave us an opportunity to look at our underwriting practices and say, like, do these hold up? Are we as conservative as we think we are? And for us, the answer came back as a. Yeah, definitely. The the performance is in alignment with reality at current. And so that's that's excellent.

Dan Kreuger: [00:15:29] That was the only deal that we actually came in in line with our pro forma historically. And since then everything has outperformed by at least some degree. But anyway, moving on to the next deal in November of twenty twenty that we lovingly refer to as grand and get rich. This one, like Anthony mentioned, was a slight deviation from the types of deals that we're typically looking at, where there's a lot of meat on the bone and there's a big value add potential. This one was located in an excellent neighborhood in St. Paul. For those of you that are familiar with the Grand Avenue area in St. Paul, Minnesota, you'll know what we're talking about. But it's kind of the old money area of town where you've got a lot of turn-of-the-century mansions that have got that that went up to kind of house the wealthy population back then. And it's still where some of the older money lives in Minnesota, a decent amount over in the western suburbs by some of the lakes. But as far as the St. Paul high net worth area, this is that. And that kind of is a perfect example of our shift that we made from a neighborhood that was in the process of improving and being revitalized through development to a neighborhood that was already mature and stable. And the tenant base in these properties was also quite good. We bought this from an owner that really prioritized keeping high-quality people in there for long, for as long as possible, which meant that his rents were a little bit low. So there was an upside potential there in that regard. But really, we didn't have quite as much upside at the neighborhood level, in my opinion. Just because it's already been it's already at the top, it's established has been fantastic. So we saw it as more of a hedge against the potential economic issues that could be still coming down the pipeline. Mm-hmm.

Anthony Vicino: [00:17:30] Yeah, and like this neighborhood, it's really hard to oversell it like it is the neighborhood that on date night it's where I and my girlfriend go. It's our favorite area of the Twin Cities. If I was to move anywhere right now, if you like, kick me out of my home, I probably go live there because I like it. I like the charm. I like the shopping experiences. And so it's like there's just not a lot of upside to it in the grand scheme, though, because it's already very near the top of the mountain. And so it's going to keep getting better. It's never going to get worse and be undesirable. And that for us represented a very stable hedge against not really knowing what was going to be happening in the next year of twenty twenty-one was going to be as bad as twenty with lockdowns and eviction moratoriums. We didn't want to find ourselves in a situation where we had to deploy a ton of capital, that we had to kick tenants out, or had to worry about the state of the neighborhood. And so that deal for us was a real grand slam opportunity, not in the terms of the not that the returns are going to be like astronomical. They're still very solid and they exceed like our baseline underwriting expectations. But it's just one of those opportunities that one, you're really excited to have the assets because they're great assets that are going to go out of style. They're great. And then, too, you just sleep better at night because it's like this this this deal, it's just kind of on autopilot in many ways.

Anthony Vicino: [00:18:53] Like, you don't have to deal with bad tenants or questionable infrastructure on the building. It's all very solid. And so it's just a fantastic deal. And, you know, we've only been operating that now for about, what, six months? This is the first full quarter after closing and it's exceeded expectations by, what, four hundred basis points. So like just straight out of the gates, it's already exceeding expectations, which again, isn't super hard to do when we come in with really conservative expectations, but it's still still good to see. So let's let's kind of pivot now to the deal that we're doing now. We won't talk about it. And so in terms of too much specifics, because like I said, I don't know exactly when this episode will go live and the deal probably won't be fully closed by that point. But just don't take this as a solicitation. Like we're we're not accepting people into the deal if we don't know you already. So you're not getting signed. But this deal is a little bit different. Kind of an interesting hybrid. And it's actually of the deals that we've done in the last year. It's the deal that I'm probably the most excited about because it represents the most potential. Upside, you know, it's a very stable deal and has good, solid return metrics, but if things go the way we think they will in this particular neighborhood, this could be a really outsized return on this on this property.

Dan Kreuger: [00:20:18] Yeah, I think you hit the nail on the head there. This one is really all about the asymmetric risk-reward ratio, meaning there's very limited downside and huge upside potential and very good, almost unlimited, a guaranteed. But even in our most pessimistic scenario, from an underwriting perspective, it still comes in looking very strong. So I think this one is a nice hybrid between the deal that we did in January. There was the deep value add deal in twenty-twenty and the November stabilized more almost turnkey deal that we did in November of twenty-twenty. If there's something right in the middle there in that Goldilocks zone, I'd say that this is that where we've got a fantastic tenant base, which is the result of an owner who had this asset before us that had been in business for probably a good 30 years. This was not a mom-and-pop operation by any means. It's been run like a well oiled machine. And the amount of capital that this guy deployed on building improvements outside of the usual unit upgrades that you can get paid for isn't, say, the tuck point in the roofs, the common areas, carpet, paint, fixtures, all these things, and the curb appeal and landscaping, all the stuff had already been done so that the work that needed to be done was at this point is just the work that we get paid for, which is a unit upgrade that can justify rents. So he he did all the stuff that normally you don't like to do, but you have to do because you don't really get paid for it, meaning you replace your roof doesn't really mean you can charge more for rent. Right. Have to do it if it needs to be done. But it's really those unit upgrades that you get to appreciate in your bank account. And he left that sitting on the bone for us, which is fantastic.

Anthony Vicino: [00:22:08] Yeah. And I don't know if you mentioned it, if I just kind of blacked out and missed it. But, you know, his selling situation, we don't go into it, but just know he wasn't planning on selling something. Unforeseen events and life just occurred. And he's finds himself in a position where he has to sell it. And so that represents a great opportunity for us, you know, a bummer for him. But that's why he was putting so much money into maintaining the things because he was planning on taking it, you know, another 30 years. And so it's just a really, really awesome opportunity that we're excited about. We'll share more about that in detail after we close and add a little bit more clear on, like, the timeline of when this episode comes out. But another another interesting deal that we didn't talk about, but it's worth mentioning here for people at home, like, you know, we talked a lot about the little guy. We talk about syndications and a lot of operators in the space. They like to go big hundred, 200 units. Big, big, big, big. You know, we're talking about we did a thirty-two-unit, then a 30 unit, and now we're doing a 55 unit. But in there we also did a little nine-unit joint venture, you know, just the little guy, he's he's cute. Not a big deal. He's not going to make anybody rich overnight. But this is as it was just a little snack, but it was a great deal. And for us, we're dealing agnostic. When a great deal presents itself, we'll take it down if it makes sense for our game plan and our in our synergies. And this was a really cool opportunity because the seller of grain and Goodrich is an old guy. He's got a lot of properties and he's selling them.

Dan Kreuger: [00:23:35] These are bad old.

Anthony Vicino: [00:23:36] Actually, he's not. But he's been in the game for a long time. So I kind of like I think of him as like the Zweig's generation. He's wise. He's very wise, actually, but he had a little nine-unit that he was looking to offload and he said, hey, you guys want this? He didn't put it on market. And he said, yeah, yeah, we can make that happen. And so what we did is we use a different tool in our toolbox, which was the joint venture tool. You know, we're probably more known as syndicators at this point because that's primarily what we do. But joint venturing is how we got our start. And it's a powerful, powerful method. And so maybe just walk us through what we affectionately refer to as Holly.

Dan Kreuger: [00:24:11] Yeah, this one was great. We got a call from Sello that we've worked with before that we had a great relationship with. And he said, hey, I've got one need with this property is to get X amount of dollars per door. And if you guys are interested at that point price point, then let's make it happen. No brokers, no commissions. Keep it super easy, super clean. And that price point made a lot of sense given the neighborhood that this property was in and the cash flow it produced a heck of a lot of sense. So, yeah, we were like, yes, let's take this down. And just so happened that we had a friend that also had some ten thirty one money that needed a home. And so this deal wasn't big enough to syndicate and we knew we wanted to definitely get it for ourselves. And at the same time, it solved our friend's problem of where can he take us ten thirty-one money. This great little deal popped up and so we structured this as a joint venture, like Anthony said, using a tick structure to see which stands for tenants in common without going into too much detail, that just allows for you to have essentially the deed cut in half. And so someone with 10, 30 bond money can put their money into the satisfy the ten thirty one requirement of having the name on the deed match the new property in the old property. Those both need to be the same. But long story short, it it, you know, checked a lot of boxes for us. Great little deal, wasn't big enough to syndicate. And I gave our friends 10, 30 one money, someplace to call home.

Anthony Vicino: [00:25:43] Yes, you know, I think that deals worth mentioning because there's always a solution and some people, they get so high in the sky about the size of deals and things like the return metrics or the what tools that they have at their disposal. But, you know, the only tool you have is a hammer. Then all the world looks like a nail. And so it can be really helpful to realize that there's other other ways of getting deals done, not just your syndication or, you know, being a passive investor in that way. And so I mention this because, you know, for our audience out there, if you hear us and you're like, oh, you know, I don't know if I want to possibly invest in syndication with these guys, but I do have like ten, thirty-one money. I don't know how I'm going to put that, like, reach out because like those deals they pop up sometimes and they're really cool opportunity. They make us feel good because they allow us to help out a friend. Whether it's ten-thirty ones can be kind of a tricky little needle to thread. So whenever we can do it, it feels really good.

Dan Kreuger: [00:26:42] And if we don't personally have the right solution for your problem, we probably know the person who does pretty well connected in the industry. And we have a lot of connections outside of our little Minneapolis St. Paul market. So we always like to make sure that doors open for people who are looking for a certain thing, for not that thing. We probably know the guy who can get you that thing.

Anthony Vicino: [00:27:03] And that's a perfect segue way. I want to touch on one last bit about our year in review is a strategic partnership we've established with a local powerhouse brokerage firm specifically in Minneapolis. Now, if you guys know or pay attention to where we congregate, our portfolio, it's historically been in St. Paul. All eleven of our assets have been there because that's the market that works really well for our property management team. But we're the Twin Cities and we're right across the what is it, the tracks from Minneapolis we've never had. Yeah, that makes it sound bad, but it's really not Minneapolis across the market. It's just never really made sense for us to from an operational standpoint, to go over there as splits the property management team in a way that's not it's not conducive until you hit a certain scale. And so that first property has to be like a certain size to justify the move. But through the strategic partnership with the local brokerage called DRAG, the Downtown Resource Group, where we're making inroads and branching out where where we have our tentacles. That sounds weird to I don't know if I like tentacles. That's Aanestad.

Dan Kreuger: [00:28:15] I mean, you know, depends on who you are. Some people like that whole octopus kind of analogy and metaphor, but it's worth noting it's dog now, not downtown resource group. It's just yeah, I was Downtown Resource Group, but it's why we're getting

Anthony Vicino: [00:28:32] Rid of is just there

Dan Kreuger: [00:28:33] To broaden their scope from just downtown to all of Minneapolis. So it's just drug now. Gotcha. OK, kind of like how TCF used to be Twin Cities Federal Credit Union. Now it's just IQF because they're not local.

Anthony Vicino: [00:28:46] I don't know what any of that means.

Dan Kreuger: [00:28:47] No, only like three people got that reference.

Anthony Vicino: [00:28:51] But all that's to say like we're not going to go into two into in-depth in that partnership or anything, but what it means is that we're going to

Dan Kreuger: [00:28:57] Specifically, speak into that. Exactly. We'll bring you guys on.

Anthony Vicino: [00:29:01] We'll have a good conversation. Specifically why Minneapolis is such an interesting market to look at, especially right now. This is there's so many reasons that local investors and people are running out of certain neighborhoods, which we look at, and we say that's an opportunity to run in. So it's kind of always running counter to what the will said the mainstream wisdom would suggest.

Dan Kreuger: [00:29:25] So we're pretty excited. Wisdom, consensus.

Anthony Vicino: [00:29:28] Oh, I'd had air quotes here.

Dan Kreuger: [00:29:31] I would like to see the wisdom. I like it. Yeah, it's I think that's a great little thing to throw in there. As far as shifting the strategy in the year, I think that's something that was a big shift for us because we didn't really have any kind of partnership like that on our radar at the beginning of twenty, it just kind of fell in our lap, made a heck of a lot of sense, honestly.

Anthony Vicino: [00:29:55] A lot of the things a lot of the biggest moves that we made in the last year, they were premeditated and I think but they're in perfect alignment with where we're trying to go. And that's the if there was one takeaway I'd like to pivoting and adapting with twenty-twenty. It's about. You know, luck is when preparation meets opportunity, and if you're preparing in the right ways, the opportunities are going to present themselves. But it's up to you to figure out how you're going to exploit that opportunity or maximize it. And a lot of times opportunities present themselves as problems. But if you can see past that and say, OK, how am I going to solve this in a meaningful way, that's going to move me forward like it's some of those things that end up having the biggest downstream effect that you just couldn't have predicted before.

Dan Kreuger: [00:30:44] On two percent.

Anthony Vicino: [00:30:46] All right, let's get out of here. It's just been you and me, we're tired of talking to each other, but before we do, I'm getting a single finger-wagging, which means it's book recommendation time. Yeah, that's what the finger wag all always means.

Dan Kreuger: [00:30:57] Oh, yeah. I got one

Anthony Vicino: [00:30:58] Cat. You can leave it. So you give me that book.

Dan Kreuger: [00:31:02] I got one for this episode I think. Oh, you do. OK, unless you have one

Anthony Vicino: [00:31:06] It's going to be like the bad tip advice. Bad advice again where we're going to

Dan Kreuger: [00:31:10] Get a twofer. Make it a twofer. I'll go first. OK, just because I am going to call her

Anthony Vicino: [00:31:18] Or am I by like half an inch.

Dan Kreuger: [00:31:22] Ok, anyway, the book recommendation for the week is mastering the market cycle. Howard Marks classic. I have been hearing the name Howard Marx pop up a lot over the last several podcast episodes and for whatever reason, I never read any of his stuff. And Anthony confirmed as awesome as mumbles that he puts out a real career. Fantastic. His books are great, but the Mastering the Market Cycle book, I think is really applicable to a lot of the things we were talking about in this episode, because we're basically talking about going through the transitionary period of a market cycle, more or less. Right. And I think that the info in that book is. Foundational, it's not super tactical, it's just like very high level, just like let's zoom way the heck out and look at the big picture that that's what that book is. And I think it's fantastic for people to be able to do that so they don't get so caught up in the weeds and the details and the minutia. Every so often you've got to zoom way out and just look at the big picture and make sure that what you're doing still makes sense on a much higher time frame, as opposed to just looking, you know, little deals that are coming across you. Just zoom way the heck out and be like, what's the big picture? What's happening from a very high level? And then make sure that that still aligns with what you're looking at when you're looking in the details.

Anthony Vicino: [00:32:44] Mm-hmm. I love Howard Marks. I'll admit I haven't actually read Mastering the market cycles. I've read a lot of those memos and his other book, The Most Important Thing. And what I love about him is that he's very transparent with this thought process. So you get to see inside the mind of a top trader, you know, Warren Buffett level trader on a consistent basis. And you can track that over 30 years of memos and just see his thought process that all these interesting points in time. And so it's a treasure trove and it's free. So would I would second that recommendation. My recommendations for today are going to be completely different. It's a book called The Algebra of Happiness by Scott Galloway. The first half of it is really just taking the idea of happiness, which a lot of his research is based on the grant study, which is like a 70-year longitudinal study of thousands and thousands of men and looked at what are the factors that led to happiness or unhappiness throughout life. And so he broke that down into these interesting little formulas. And then he has a little bit of his life story in there. And then, all in all, it's very, very good. It's a book about happiness. But I have never been sadder reading a book. It made me so sad for some reason because I was like, am I think I'm doing life wrong in some ways, but it's very, very good. I highly recommend it. So like it. Yeah, that's going to do it for us today. Guys, thanks for joining us. Hopefully enjoy just being back with the good old boys, just the two of us. And we'll catch you guys next week.