How the Recent Fuel Shortage is Similar to Investing

Mike Lester

by Mike Lester

Jul 19, 2021

Listen on Spotify Listen on iTunes


Speaker 1 (00:02):

Welcome to the Retirement Wealth podcast. Our goal is to help those retired or soon-to-be retired investors make more informed financial decisions and live an enjoyable retirement. Our host, Mike Lester, is the founder and CEO of Talon Wealth Management. Mike is an investment advisor representative of Retirement Wealth Advisors, Inc., and SEC-registered investment advisor. Thanks for joining us today, and let’s get started.

Kristen (00:31):

Mike, you are a busy dude with so many different offices for Talon Wealth Management that are conveniently located to anybody listening, by the way. So, you’re on the road a lot.

Mike Lester (00:40):

Well, busy-ish. Yeah, but we want to make it as convenient for clients as possible.

Kristen (00:44):

Well, there’s that that keeps you busy and you love and have a great passion for. Then there’s your wife Katie, who is very lovely. She’s a doctor. She’s busy with her career, and you guys are both busy with the four kids.

Mike Lester (00:57):


Kristen (00:57):

How are things going with the family? I mean, A, I know it’s busy, but anything fun lately?

Mike Lester (01:02):

It’s always fun. Yeah. I mean, Katie and I both obviously work hard, like a lot of our listeners out there. We get the majority of our time just to relax and sit back with the family and the kids, certainly evenings, mornings, and weekends, but just kicking back and appreciating things. We’ve been able to do a lot of that now. Things are warming up. Our kids, they’re water kids. Peyton swims, and she was fortunate enough to get qualified for Junior Olympics. It’s still out there, to see whether or not we go to Texas this year for that, but-

Kristen (01:32):

Very cool.

Mike Lester (01:33):

… big news in the Lester household this weekend. Mr. Finn, the four-year-old, decided he was going to start swimming. So, we’re about a week into it now, but that’s pretty cool for us because he was-

Kristen (01:45):

That’s a big deal.

Mike Lester (01:46):

Yeah. We never did the-

Kristen (01:48):

The lessons?

Mike Lester (01:49):

He’s a pretty confident kid. I was afraid of what would happen to the teacher in the lessons. I know he was… So, he may have been the kid the teacher said, “No, this one’s just not going to work.” So, we let him take it at his own speed, and I felt like because he’s got the older siblings, eventually he’d just say, “Hey, listen.”

Kristen (02:06):

I got to figure this out.

Mike Lester (02:07):

“I’m going to do it,” and somehow a switch flipped last weekend, decided he was going to go for it. So, it’s good for him, so we’re very happy about that.

Kristen (02:14):

That’s a big deal.

Mike Lester (02:15):

It’s a big deal, yeah. Water is scary.

Kristen (02:16):

The youngest, and presumably, your last kid. I don’t know what God’s plan is or you and Katie’s plan.

Mike Lester (02:21):

I don’t either, but presumably, yes.

Kristen (02:23):

But that’s got to be weird, to see a milestone in your youngest child happen. Does it make you feel older, or just proud?

Mike Lester (02:30):

Right now, I’m proud. Maybe later-

Kristen (02:32):

Very cool.

Mike Lester (02:32):

Yeah. Also, there’s water around. Right?

Kristen (02:38):

Yeah, less liability.

Mike Lester (02:39):

It’s just safety. Yeah, less liability. I mean, we just want to make sure he can fend for himself if he’s in the water, and also-

Kristen (02:44):

[crosstalk 00:02:44]

Mike Lester (02:44):

… parents that are out there, grandparents that are out there, it’s nice to one day to be able to take down that pool fence. You’ve got this pool, and you’re staring at a pool fence for… We’ve been staring at it for 12 years now. It’d be nice to take the pool fence down.

Kristen (02:56):

A step closer, my friend, a step closer.

Mike Lester (02:58):

A step closer, yes.

Kristen (03:00):

Everything is a gradual thing that happens over time, and the same goes for learning to swim, but let’s talk about the financial part of how things happen over time, because last spring it was toilet paper. This spring, it’s fuel. The recent gas shortage on the East Coast is just another example of herd mentality, according to Duke University professor, Rick Larrick. He tells ABC 13 in Asheville, North Carolina that this scenario reminds him of the bank runs during the Depression.

Professor Rick Larrick (03:31):

The very fact of seeing the line can create this self-fulfilling prophecy where even if I don’t really need gas in the moment, I think I need to hop in that line and get my gas, and then it works everything worse for everybody. We use other people’s actions as a way to figure out, oh, if they’re doing it, it must be the smart thing to do.

Kristen (03:49):

Sounds like what many of us do with certain investments too. Mike, you were getting on to me… I forget. A few weeks ago I said, “Hey, I’m thinking about to the is Bitcoin thing. Everyone’s talking. I’m thinking about our friend-”

Mike Lester (03:59):

Hey, good thing you listened to me. It’s tanking.

Kristen (04:01):

But because everyone’s talking about it, I’m getting intrigued. I’m getting interested, and that happens with so many other investments to all of us listening today.

Mike Lester (04:08):

Yeah. Bitcoin comes in conversations with clients, and then with people who are taking us up on our complete financial plan offer quite a bit. As we’re walking through the planning process, certainly, there can be a value to trading something like Bitcoin, but you have to be willing to do that. You got to spend the time trading it. You got to be in, you got to be out. Long-term, I don’t know. Kristen, in financial services we refer to it as speculation. So, Bitcoin is speculative. I had a question from a client, actually, an email, asking me about a stock. I won’t mention exactly which company, but it was an IPO that recently happened about a month ago, and I can see why potentially moving forward, it could turn into a big deal.

Mike Lester (04:50):

But his question specifically was, “Hey, listen. I’m thinking about taking some profits out of this investment that I’ve got, and I want to move it over into this particular investment,” and my explanation to him was, “Hey, listen. I’ve done the research for you. You’ve probably already done it yourself, but it’s speculative. It’s a relatively new company. Yes, it’s in a growth industry. It might turn out very, very well, but there are plenty of competitors in the industry, and there are a lot of things that could get that particular company off the rails, basically, to where it turns out poorly.”

Mike Lester (05:18):

So, my advice to him was, “Hey, listen. The amount of money you’re looking at spending is not going to make or break you long-term. As long as you’re willing to lose that money, then you’re probably going to be okay,” and I know he is. He’s willing to lose it. It wasn’t a ton. But he wants to know my opinion. My opinion is I am your financial advisor. It’s my job to help you protect and grow your money. That is a speculative investment. It could turn out poorly for you, but at the same time, it’s not going to hurt you if you lose that money, and I was able to give him that insight. Now, is he going to be happy if he loses the money? Probably not. Do I think it was a great investment? Probably not, Kristen. I gave him some advice on some other things that I would probably do instead of that, but if his heart is set on investing in that because he thinks it’s great, then fine. You can take that back to Bitcoin. Right?

Kristen (06:03):

Mm-hmm (affirmative).

Mike Lester (06:03):

We have clients that are investing in Bitcoin, and their heart is set. They’re in an environment, whether it’s with family or whether it’s at work, where people are doing it and they want to be involved. Then I can understand that. It’s my job to make sure that you aren’t on the 10-yard line swinging for the fence. Our clients aren’t going for two.

Kristen (06:19):

You do not know sports at all, my friend. A 10-yard line-

Mike Lester (06:21):

I don’t know sports, but I know a little bit about football and going for two versus a field goal. Right?

Kristen (06:26):

That’s true.

Mike Lester (06:26):

So, my point is we’re not working with people that are going for two. Right?

Kristen (06:31):


Mike Lester (06:31):

We’re just going to do the field goal and move on, kind of thing. Point is herd mentality is a thing. Our clients deal with it. They’re surrounded by other people sometimes they are like, “Hey, you should do this. You should do that.” You don’t want water cooler investment advice. That’s a bad idea, but a sound financial plan means you’ve got a diversified portfolio that in my mind is actively managed, and you know exactly what your goals are and how you’re going to accomplish them in the portfolio, and that’s why we walk people through the complete financial planning process.

Kristen (06:59):

Don’t put off taking the next step for your financial future. Find out what all of this information means for you at At The Wall Street Journal’s recent CEO Council Summit, Treasury Secretary Janet Yellen said that she feels pretty confident about the US economy and overall employment moving forward.

Janet Yellen (07:20):

The demand for workers is increasing, and many people still aren’t able to return full-time to work because they still have children out of school or are concerned about health issues, but I expect all of this to be transitory, and I think the economy’s going to get back on track. I don’t anticipate that inflation is going to be a problem, but it is something that we’re watching very carefully.

Kristen (07:48):

God, I could listen to her like never. Bless her heart. She’s a smart lady.

Mike Lester (07:52):

She is, and-

Kristen (07:53):

But I hope she’s right, Mike, because according to a survey from the National Federation of Independent Businesses, 42% of small business owners reporting job openings that they could not fill in March. In fact, I saw an article from Business Insider about a guy who owns 60 fast food restaurants in Florida, and is paying people $50 just to show up for an interview, and he says it’s not been this difficult for him to hire workers since the late ’90s. So, I want to know what you think. You’ve been helping people over 20 years with their financial life. Is the fed right, and good economic times are likely going to continue, or is the hiring problem a sign that we need to prepare for some uncertainty here?

Mike Lester (08:39):

I mean, real people that are out there are experiencing things like trying to hire, and just looking at the economy, it’s a concern to me. I mean, we’re out there with our clients every single week. We’re looking at real issues that real people are dealing with, and if you’re out there where the rubber meets the road, so to speak, and you could see how businesses are being effected, Janet Yellen’s comments aren’t all that comforting at this point in time. Now, I agree with her on the inflation thing. I don’t think inflation is likely to be an issue. If I change my mind I’ll let everybody know, but that’s the latest scare tactic on the 24-hour news cycle. Things are getting more expensive. It’s going to be a problem.

Mike Lester (09:16):

Now, she said she doesn’t think it’s going to be an issue, but she thinks the economy is going to do well. That’s where I’m a little worried, and what we’re focused on when it comes to managing money, because I do think we’re going to honestly to be ready to pull out of markets at some point here in the future. I think we’ve got some time. 2021 might turn out to be a pretty good year, but I’m not confident on the backend of this. Again, people not going to work, frankly, because they get paid more to stay at home, and this is a Biden policy, essentially, or sort of states that are more liberal policy, to pay people more to stay home than go to work, that’s a problem for small business. So, what if small businesses can’t hire people to come into work? Eventually, they go out of business, and those jobs are gone come September when these benefits run out. I’ve talked to people that are trying to hire, and they’re interviewing individuals that say, “Well, just pay me under the table.”

Kristen (10:06):

Hmm? I’m sorry.

Mike Lester (10:07):

“Sure, I’ll come to work for you, but I’m not going to give up my unemployment benefits. You pay me under the table, I’ll work for you,” and the people that I know-

Kristen (10:13):

Oh, my gosh.

Mike Lester (10:13):

… their own business is doing this are writing that name down and going, “Okay. When this person comes back for a job and the unemployment benefits run out, don’t hire him. We want to hire people that aren’t like that.” So, again, it’s an issue, I think, that could’ve been avoided, but they’re not doing anything to avoid it, and paying people to stay home is not good for our economy, and the problem is the trickle-down effect at the end is probably bad. So, I don’t think we’re going to get big inflation, but not because I think the economy’s going to be great. I suspect… Again, I might be wrong, and we’ll continue to update our listeners week after week, Kristen, but if people don’t continue to work after COVID’s over, for the most part, vaccines are out, after unemployment benefits are over, if people don’t continue to work and spend money, inflation isn’t an issue because nobody has a job to make money to then go spend in the economy to drive the prices of goods up, which is inflation.

Mike Lester (11:05):

So, you have to have a really, really strong economy to have a really big inflation issue, regardless of all the money that they’re printing right now. Again, I’m concerned about it. I know that our clients know that we’re concerned about it, and we’re taking steps in portfolios to have a plan, and if I was out there right now with a 401(k) or a retirement plan through my employer that’s not a 401(k) [inaudible 00:11:27] account, if I’m working with an advisor that isn’t sitting down and having this conversation with me about, “This is what we’re going to do if the economy doesn’t do very well moving forward,” I would be a little concerned. I would want to have a plan. I would want to know what that plan is.

Mike Lester (11:41):

Right now, we’re looking over our portfolios, and I’m fearing that the recovery’s going to be weak. I’m worried about the spending. I’m worried about them raising taxes. I think all of that probably happens at the wrong time. You know me. I’m not a pessimist, but in this situation I’m pretty pessimistic, and right now I don’t know how they pull off an amazing recovery into 2022, so it’s time right now to take a real close look at your finances, take a close look at what’s likely to happen if things don’t go well moving forward, and just understand it doesn’t mean you have to get out of the market right now, but you need a plan for getting out of the market.

Mike Lester (12:17):

We have a plan for getting out of the market. It’s very specific. If a certain thing has happened, we’re going to get out of the market. The reason we’re going to get out of the market for our clients is because our clients are retired or pretty close to it. They can’t afford big losses, and they’re more willing to give up a portion of gains that they are to take big losses. So, if we have to get out, we will.

Speaker 1 (12:35):

If you would like to have a comprehensive financial plan and an analysis of your current portfolio, go ahead and visit our website at, and we can do that for you complimentary. Thanks so much for joining us on today’s show. Be sure to subscribe to our podcast. Visit our website at for more free retirement plan and investment resources. Thanks for tuning in to today’s show, and we’ll see you next time on the Retirement Wealth podcast, exposure to ideas and financial vehicles discussed, should not be considered investment advice or recommendation to buy or sell any financial vehicle. This information should not be considered tax or legal advice. Individuals should consult with processionals specializing in the fields of tax, legal, accounting, or investments regarding the applicability of this information to their situation. Past performance is not a guarantee of future results. Investments may fluctuate, and when redeemed, may be worth more or less than originally invested.

Mike Lester

Mike Lester

Comments are closed.

How the Recent Fuel Shortage is Similar to Investing