Notes from the Schwab Conference

The annual Schwab IMPACT Conference always provides financial advisors with a great learning experience. The recent event in Chicago was no exception. Please read on for some fascinating insights shared by this year's incredible speakers.


Not Impossible Labs -- I was totally overwhelmed by Mick Ebeling's team as they employed "technology for the sake of humanity" to ease suffering. Watch the compelling videos at www.notimpossible.com to see how low-cost devices were developed to help people, such as eyeglasses that enable ALS patients to communicate with their eyes and movable prosthetics for victims in war-torn Sudan. The self-effacing Ebeling passionately conveys an empowering message: When you see something that needs to change, commit to it, then figure out how to accomplish it. After all, "what is possible today was impossible before."

Bitcoin -- Numerous speakers touched upon this complicated subject. I particularly liked bond-guru Jeffrey Gundlach's take. Gundlach argued that Bitcoin's incredible price volatility significantly impairs its use for buying goods and services. Yes, its value has risen dramatically, but there have been sharp drops of 25% along the way. Imagine you agree to buy a car for a certain number of Bitcoins. In the inevitable two-hour paperwork dance that accompanies the purchase, the value of your Bitcoins may have changed substantially. Who takes on the currency risk before the sale is completed, the buyer or the seller?

Scary Computers -- Joshua Cooper Ramo wrote a book, "The Seventh Sense," about the future. I'm always leery of such efforts (as are a number of reviewers of his book on Amazon), but he does offer some thought-provoking points. For one, computers are more powerful when they allow us to create networks. These networks become stronger as more people use them; think Google and Facebook. The result can lead to "winner-take-all" markets. It gets even scarier. Ramo discussed how machines are starting to learn and think on their own. The power in the world will aggregate to those who control and program these machines. Yikes!

Old-Fashioned Marketing -- A number of breakout sessions about marketing involved, as you can imagine, social media. We may underestimate, however, the importance of face-to-face communication. The Wharton Business School professor Jonah Berger explained how word-of-mouth is more valuable than advertising. Personal referrals are generally trusted whereas advertising is viewed as self-serving. In spite of its prevalence, Berger claims that only around 10% of personal referrals are made via social media; the rest are done in-person.

Michael Lewis -- The best-selling author of "Money Ball," "Liar's Poker," and "The Big Short," spoke about his most recent book, "The Undoing Project." Lewis tells the tale of how two Israeli psychologists, Daniel Kahneman and Amos Tversky, developed the field of Behavioral Economics. Lewis takes a potentially dense subject matter and makes it come alive as he weaves theory with the unique personalities of the main characters. A highly recommended read. At the event, Lewis entertained as a captivating, and slightly salty, storyteller. A point he made worth noting: "We're programmed to see the world as more deterministic than it really is." In other words, randomness is more pervasive than you realize. It can be difficult to predict what outcomes will likely arise from a particular action. Moreover, even subsequent to something happening, you can not necessarily know what caused it to occur.

David Cameron -- The former Conservative Prime Minster of the United Kingdom described how globalization has led to great economic advancements, but has left some people behind. The increasing pace of change has made it a challenge to make sure everyone benefits. Of course, he didn't have any easy solutions.

Words of Wisdom

The doors of wisdom are never shut. -- Benjamin Franklin