David Rosenthal: evaluation

Transcript context

…You want to be able to lower them. Right. When Coronavirus hitm the Feds slashed it to less than zero, and the same thing in 2008. It’s a double whammy of economic shock plus major interest rate hikes. It was more than a decade really until World War II. The stock market, the Dow wouldn’t return to its high before the crash until 1954. That’s 25 years. That’s a quarter of a century just lost. Crazy. Okay, so back to Howard and the Buffetts. Howard does something pretty crazy. It’s bad. Warren is born less than a year after Black Tuesday. On August 30th 1930, Warren Edward Buffett is born. The next year—it wasn’t until 1931—Howard was working as a stock broker for Union State Bank and the bank fails. Not only is Howard out of a job, but all the family’s money’s at the bank. They got no money, they got no job, and Howard and Leila now have two kids. What does Howard do? He does the 100% total contrarian move. First, he does try to go to his father, to Ernest, and get a job at the family grocery store. Ernest was like, I don’t have any money to pay you. I can’t employ you. Howard sets up his own stock brokerage firm. We’re in the middle of the Great Depression after the crash, and he’s just like, well I know how to be a stockbroker. He was not totally crazy because the world is melting down, but for anyone who does still have some wealth left, they need something to do with it. They’re not going to put it in the stocks that they were in before the crash. Howard has this business plan. He starts going around Omaha to anyone who still has any wealth left, and he advises them on hyper conservative investments that they can use their capital for select utility companies, municipal bonds, that kind of stuff, and it works. There’s actually demand for this kind of service. He’s placing all these hyper conservative securities. He ends up making (I think) pretty quickly way more money than he was making at the old job. Wow. I didn’t realize that he broke out on his own there and started his own brokerage.…

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