Editorial Team

The Braintrust: Max Osbon (Osbon Capital) on Truth and Fiction on the 2020 Stock Market

Max Osbon grew up immersed in investing, with his father John teaching the ins and outs of the market from a young age. “It’s in the family,” Max Osbon says. 

In 2005, the father-son duo started Osbon Capital Management, a private investment firm that they jointly run. From that perch, they’ve been able to study trends across the market, and have been especially interested in the way software can operate remotely with continuous improvement cycles. 

This November, Max Osbon joined the Unifimoney Board of Advisors — he’ll be helping to make Unifimoney’s investment platform the best in the neobanking market. 

We gave Osbon a call to learn more about what drew him to want to get involved in the Fintech space and which of the 2020 trends are real and which are fool’s gold.

Was there an ah-ha moment when you started to see the personal financial space beginning to shift away from the incumbent banks?

Osbon: Well, I would say it's happened this year 2020. Things happen slowly, then suddenly. Silicon Valley technology often experiences these amazing exponential growth curves. Essentially, what we're seeing right now is the start of an exponential curve and the shift away from banks into fintechs. It could be asymptotic, meaning the curve will eventually flatten or it could be exponential. I think we all have to be prepared for it to be exponential. Some banks will stay in the game but only if they are actively focused on adapting to the new demands and opportunities out there.

If you're going to ask anyone to innovate, disrupt, and adapt, it's going to be the digital-first cloud-native Fintech companies that do it. They're going to be the ones to come out with the positive surprises that are going to change everything for everyone. So, much of the upside, in my view, is firmly in the court of the Fintechs.

Why did you decide to join Unifimoney? How do you hope to maximize Unifimoney users wealth-building via their investment platform?

I'm an early investor in Hummingbird, which is a regulation technology company that Unifimoney uses to track suspicious activity — Know Your Customer (KYC),  Anti-Money Laundering (AML). Obviously, I think very highly of the Hummingbird team and they connected me with Ben. If Unifimoney is using Hummingbird for their AML, you guys are obviously very forward thinking and in good company. So, after I took a look, I saw that you had a great team and a great vision for the company, so I'm curious to see what you can build. 

For a while, I've been curious about technology solutions around finance and investing. We don't have a lot of levers we can traditionally pull in finance. We kind of have to work with what we have, which is quite a bit, but it doesn't mean that there can't be more and it can't be made better. So, I'm really curious to see all the things that we're capable of building when you have top-level engineers working on expressing a new vision.

There seems to be a newfound democratization of investing. What could the effect be for long-term wealth building if the average consumer could enter the investment space with more confidence and more ability to succeed?

Well, it's like a big poker game and there are going to be a lot of sharks at the table, unfortunately. You're not going to learn how to invest from CNBC, because they have to say something every day and it's just not possible to have a groundbreaking insight into how to invest every single day. I love Jim Cramer. I think he's brilliant and he's super entertaining. But you'll go insane trying to follow his comments every single day on the market. Broadly speaking, he's on point and he knows what he's doing. But it's just too much. What you need to do is make decisions on more of a quarterly basis — slowly and methodically, and deliberately. 

With all the noise, it's very difficult to learn. And you also have to contend with the Paradox of Choice. So, we know this from all kinds of psychological studies, but if you go to a restaurant with too many items on the menu, you don't know what to order on. Now you go to the investment markets, and you have tens of thousands of options. It's basically impossible to decide, so you look to your friends, you look at what's hot, you look at what's worked, and you try to figure out what will work going forward. 

I do think that when you can find good, honest, ethical people to follow, you can learn an incredible amount pretty quickly. However, it's taken me a long time to find the voices that I trust and want to learn from. And, of course, those voices are less entertaining — the really sexy headlines are the things that go up 1,000% or 800% over a short period of time with no obvious reason why. But it's more valuable to look to the people who understand that there always has to be a match between a trend and a result. They might be less interested in giving advice every minute of every day, but they can help you start to understand the why and then look for it again.

What would your strategy be to get more Americans investing? What could that mean for wealth-building?

I think that the ability to write your own rules and automations would be really interesting. We all play around in Excel to forecast our financial future and come up with different equations for how we could get there. But there's never been a tool that allows you to express those forecasts — you know, "I'm going to save X percent or X number of dollars." It would be so much easier to write that into a program or an algorithm, and let that automatically make the decision for you. Just making things as passive and easy as possible. It's painful to make some of those saving decisions — it's much easier if it already is happening automatically and then you would have to reverse it. 

I know you don’t agree with the Jim Cramer school of investing advice, but let’s hear a minute of the made-for-a-blog-instead-of-cable-news Mad Money with Max Osbon.

[laughs] Okay. Here it goes. 

There are trends that are cyclical, that come in and out. Buying airlines, because of the virus, is chasing a cyclical trend. It's clear they're depressed, and that they'll come back. But what are they going to do 5-10 years from now? Are airlines going to be the place that you really want to hold your wealth? Are they going to be the innovative companies that you want to own a piece of? Because that's what you're doing when you're buying these stocks: you're buying a piece of the company. 

Now that we have this public-cloud wave — where you’re essentially hooking up a countless number of servers and nodes to do processing on the internet — you're pumping up the brain power of the Internet. That's leading to this incredible rise of innovative SaaS companies. So, some of the longer term trends I would recommend buying into are e-commerce, cloud digitization of finance, and the data and AI revolution. Those waves are not going to stop. 

Regardless of what happens with Coronavirus, or anything else, it's worthwhile identifying and investing in the trends that will continue. We're still going to want to be able to buy things with one click and have them shipped to our door, whether it's Shopify or Amazon or, if you're in Asia, Sea Limited, or, if you're in Latin America, Mercado Libre. You're still going to want to be able to access all the information as quickly as possible on any connected device. So, these spaces are where I see the returns coming regardless of what happens next. And there's a whole ecosystem that supports that from top to bottom that is full of excellent investment opportunities.


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*Important information and disclaimers

The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.