Today’s guest columnist is Ross Stripling, a pitcher with the Toronto Blue Jays and a broker with Skyward Financial.
As a Major League pitcher and a licensed financial adviser with substantial assets under management, I get asked—a lot—about the similarities between the two careers. And, no surprise, the biggest commonality is they’re both numbers games.
In stocks, you need to be able to dive into a company and know what you’re looking for in terms of growth numbers, or valuations, or trends, and use that data to decide whether to buy.
In baseball, it’s kind of the same. I can look at the New York Yankees’ Aaron Judge and see what he hits against 0-0 fastballs, or 2-1 sliders. I can answer questions about his approach: What does he put on the ground? What does he swing at and miss with two strikes? Those numbers help me put together a plan to attack him.
And, yes, there’s a mentality you need in both disciplines. You’ve got to talk yourself off the ledge sometimes.
I’ve had to do that in both my jobs the past year. I had five good years with the Dodgers, where I built confidence and felt like I knew what it takes to get guys out at the big-league level. And then suddenly last year, I was terrible, struggling with like a 6.00 and 7.00 ERA. I’d watch video and work in the bullpen with coaches, and everyone was saying, “You’re throwing the ball well; your results should be better.” And they weren’t getting better. I told myself to put away that weird year—and then I came out in 2021, now with the Blue Jays, and I stunk again. But you have to trust you belong here and that you’re smart enough to find hitters’ weaknesses and exploit them. It’s started to turn around. I’ve made some changes mechanically, but really, a lot of it was staying the course.
With stocks? Look back to the start of the pandemic, when we went through one of the steepest declines in market history. The bottom just fell out. I’m 31, and up until then, everyone my age could basically throw a dart at a board for the previous decade and know the stock would go up. This was the first time my cohort was tested. You can say you’re long-term minded, but when you lose 30% in three weeks, it can be hard to hold out.
My clients did, and they got rewarded for it with a V-shaped recovery. They kept stuff they loved for the long term, sold a few losers to raise some cash, and used it to buy more of what they loved at a 30% discount. We bought e-commerce everywhere we could—the leaders of China, of Latin America, and of Europe. We also bought stay-at-home stocks as soon as it became clear how prevalent and lasting working from home would be. To be clear, we are not short-term traders. Our long-term thesis about technology just happened to have gasoline poured over it, and COVID lit the match. The world was already headed toward stay-at-home and software-as-a-service companies. The pandemic just sped it up.
I like tech and growth stocks, and when I look at them, I dive into at least the last couple of earnings reports to see if they’re profitable, and if they’re not, they need to be growing like crazy to justify a buy. You check their debt level, and you want to see plenty of free cash flow. I also like to use forward price-to-equity as an indicator. It’s not revolutionary. I’m certainly not reinventing the wheel with my approach.
That said, in the last year crypto and some of the meme stocks have created a lot of interest from clients. I understand. You get FOMO. You want to be involved. I bought some AMC for myself and tried to do a little short-term two-week trade. I lost on it. But that was just for me. When you have someone else’s nest egg in your hands, it’s different.
What I tell my clients, especially with crypto, is it’s unregulated. So, whatever you would take to a weekend in Vegas and feel OK about losing, throw that into crypto if you want. But be aware that crypto is just gambling until our government or some institution clarifies what piece of our economy it’s going to be. I’ve had plenty of clients start their own Robinhood and do it themselves. But that’s not my job. Corny as it sounds, I’m investing for my clients’ future.
What’s that future look like? I’m bullish, especially through this summer. We’ve had stimulus, people are getting vaccinated, and they want to go out and spend the money they’ve sat on during the pandemic.
There’s been a lot of talk lately about inflation, but I’m not telling clients to worry about it yet. We didn’t sell at the start of the pandemic, and we’re certainly not going to sell now. We’re holding on to the stuff we got, and we’re going to let it ride.
I’m bullish beyond the short term, too. I’m part of a new startup firm, Skyward Financial, with Matthew Houston and his father, Lynn, who were my bosses at the B. Riley branch in Houston. We opened up less than two months ago. I’ve got equity in the business, and it’s awesome. Our slogan is “Financial Navigation for a New Generation.” We’ve had a renaissance this last year where a whole new group of investors got into stocks. They were home, with free time and some new cash, and they’re fired up about the market. So are we, and we’re here to help them learn about stock picking, and to show them how to grow their wealth.
Stripling has a degree in finance from Texas A&M and has pitched in the Major Leagues since 2016. Skyward Financial is a member of the Independent Franchise Owner Network of Wedbush Securities. Member: NYSE / FINRA / SIPC Securities and Advisory Services offered through Wedbush Securities, Inc. The opinions expressed are those of the author. They do not purport to reflect the opinions or views of Wedbush Securities, Inc. Information is provided for general purposes only and should not be considered an individualized recommendation or advice. Investing involves risk including the possible loss of principal.