”My spelling is Wobbly. It’s good spelling, but it wobbles, and the letters get in the wrong places.”

― Winnie the Pooh

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Welcome to claybaker.com, aka "Stay Invested".  This is a project to see if the average investor can produce above-average returns and do it on our own.  We already know from our collective personal experiences that the average investor can underperform the market, with or without a plan from a professional helper.  If that weren't true, you wouldn't be reading this.  The question is: can the average investor, with the right plan, consistently outperform professional helpers and the overall market?  You may be thinking that I have an ax to grind with professional money managers, but actually, I don't; I just want you to make more money.  If you own a business and you see you're losing money, the first thing you do is look at expenses and see if there is anything that can be cut.  Likewise, with investing, I think it's essential to remove fees and expenses everywhere we can.  However, we can't cut our way to profitability; we need investments that earn more while also not exposing us to unnecessary risk.  The goal is simple: invest wisely to earn the money we need to take care of ourselves, our moms, our dads, and our children, so that everyone can live their lives with the resources they need.  And if we have extra, I hope that we all use it to make the world a better place by giving back however you choose.

 

I can sense your skepticism. I hope that before you turn your hard-earned money over to a professional advisor, whom you don't know, that you'll have the same skepticism of their ability and anything they promise.  Just join in the conversation and be a part of the journey.  If I'm right, you win.  If I'm wrong, well, I'll survive the ridicule and try again and again until I get it right.  That's the core skill of investing: keep learning and keep trying.

 

This is usually the place where the author tells you all the reasons why he or she is a financial or investment genius. Sorry to disappoint you, but if you came here hoping to find that person, there's no need to keep reading.  Typically, investment blogs and newsletters are written by people with a Harvard, Stanford, or Wharton MBA, service on boards of publicly traded companies, years of trading at big-name Wall Street firms, and the alphabet soup of acronyms that make you stutter when you read (CFP, MBA, CFA, ChFC, CLU, CPA, RIA, AIF, FINRA, EA, CEBC, RHU, CPCU, AAMS, CMFC, LIFA, CFS, CIC, CIMA, CMT, PFS).  That ain't my story, I have no acronyms to offer you. To be fair, I'm not new to investing or uninitiated to the markets; I do come at this with some knowledge, experience, and a perspective that I hope you'll find valuable. I've been running a successful hedge fund with a partner for a decade.  Our long-only equity fund used a unique, no-derivatives approach to hedging our high-growth positions.  In October 2025, I retired from the fund and decided I would put more energy into helping individual investors learn how to create a successful portfolio on their own.  In short, I'm highly passionate about investing in the stock market.  I've made profits in the stock market and had some significant losses too, and from every investment I've learned a great deal.  The most important lesson is the hardest: stay invested. Please join me on this journey as I create a portfolio, track it daily, respond to your feedback, and blog about our progress for one year. 

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In the beginning

My father was a stockbroker, specifically a branch manager for Shearson.  He spent his entire professional life working for Shearson for over 45 years.  Dad loved the brokerage business and loved to talk about it even more.  You might say our whole house lived the brokerage business every day. During the late 60s and early 70s, when I was in grade school, I'd take the bus from school to my dad's office in Century City, CA, and spend the waiting hours helping out; I was the office gopher. Dad was the boss, so he didn't leave first.  I'd make copies, run for coffee, throat lozenges, and cigarettes. I'd run messages to the cage, whatever the brokers needed.  This was in the days when all the brokers had desks facing the "Big Board," a massive electromechanical ticker that ran across the entire wall of the office.  On every desk was a Quotron machine that brokers could use to instantly call up the price and data for any publicly traded stock. I remember the time when the Quotrons were installed.  I found the entire place magical.  In fairness, I didn't fully understand what they all did, but it was so cool!  Turns out a bunch of the best stock brokers in the country were all in my dad's office, so I did what any curious kid would do: I asked questions.  I constantly asked questions, and the answers just made me ask more; I totally got why my dad loved the brokerage business.  The sights, the sounds, the pulse of it all was intoxicating.

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I came to learn that lunch with stock brokers was very different from lunch at the school cafeteria, and I liked it a lot.  On those days when I'd get out of school early, Dad would take me along to have lunch with some of the other men in the office.  I could almost order for them, "Three martinis, one Manhattan, and a bourbon and branch", occasionally there was food too.  When I'd order, they would all have a big laugh because there was only one thing on the menu I wanted, a Monte Cristo Sandwich with raspberry jam on the side.  While I ate, my dad and the other brokers would talk about the markets, a company stock, or a particular client.  I loved hanging out with my dad, and dorky as it was, I loved hanging out with the men in his office.  I didn't have too many friends at school, but these guys took me in and, for whatever reason, thought it was fun to explain it all to me.  This was the beginning of my investing education, and every once in a while, I'd explain it all back to them! Every day I saw the brokers come into the office and go through the daily rituals; scan the papers, scan the Qutron, read the sell sheets, meet with clients, make 100 phone calls, shoot the orders and confirmations back-and-forth through a vacuum tube system.  All the while, the ticker symbols and prices flopped into place on the big board like the sound of a million dominoes tipping over.  Being in my dad's office was like being at a football game; one day, everyone is cheering over a win, the next, all you can hear is the clicking chatter of the board as the somberness of loss prevailed. On good days, I ran for donuts and candy; on bad days, I ran for cigarettes, lots of them.  I loved the way everything seemed like controlled chaos.  

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My dad started paying me for the work I was doing, mainly because the brokers thought it was criminal that I worked so hard and wasn't getting paid.  "Bobby, what are you teaching the kid if he works hard and doesn't get paid"?  One payday, I asked Dad if he could pay me in the morning instead of at the end of the day.  Dad looked at me, kind of surprised, and asked why.  "I want to invest my pay in the stock market, so I need the money before the market closes". Of course, I didn't know anything about opening accounts and being of legal age and all that, but Dad decided this would be a good thing to do.  So he paid me for the week, and I turned to leave his office.  "Hey, wait a minute, I thought you wanted to invest your money in the stock market?"  "I do, but I need to go see my broker first". My dad was shocked, but in true form, he went with the flow.  "Whose your broker?"  I knew I didn't have much money, and I knew that one of the kings of penny stocks was just down the hall, Mr. Sol Lasher, and I also knew that my dad didn't know anything about penny stock investing; mainly because I had heard Mr. Lasher say so on several occasions.  I also went to Mr. Lazzar, a broker in the office that my dad respected a lot.  I talked to Mr. Lazzar at length about investing and asked him for a recommendation. He declined to help me himself but recommended Mr. Lasher.  After explaining my decision to my dad, I went to Mr. Lasher's office and asked him to help me invest.  He agreed, said he would work out the details with my dad, and said, "Come back in an hour, I'll have some ideas for you".  Mr. Lasher laid out the S&P sheets for three companies.  He told me to read the sheets and pick one.  After some difficult reading for someone not yet 13, I chose a company called Sea Containers. Mr. Lasher said, "Good choice, best of the bunch, but tell me, why Sea Containers?"  I told him that I had seen those big containers on ships, trains and trucks and that seemed like a really cool way to move stuff around the world; I guess I know what those are, I really don't understand what these other two companies do.  I would be in my 30s before I truly appreciated the wisdom of that decision.  I invested $100 in Sea Containers stock and watched it daily as it appreciated much quicker than I expected.  After about a week, Mr. Lasher recommended that I sell my shares, and before I knew it, I had enough money to buy a new pair of skis, boots, poles, and a parka.  My penny stock appreciated to almost $3/share. I loved the stock market and was hooked for life.  I had just made more money in a few days than I would all month by schlepping coffee.  The stock market was undoubtedly the greatest place on earth to make money.  

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The next stage

Fast forward a few decades, and I've graduated from college, worked for a couple of software companies and an internet browser company, pitched a few of my own companies to Silicon Valley venture capitalists, and started a design firm.  I'll skip all the big ups and big downs in life to keep the story short.  By now, I've had several experiences working with stock brokers, bankers, private wealth managers, and discount brokers.  Looking back, they all had one consistent characteristic: they had something to sell me.  My dad once told me, "If you go to Ford, the salesman is not going to try to sell you a Chevy.  He's going to sell you what he has, and it doesn't matter to him whether it's the best car for you.  The same is true in the brokerage business."  That was pretty sobering.  My dad basically told me that stock brokers weren't there to make me wealthy; no matter how much money I gave them, they were there to sell me something to make fees for the company and themselves; my needs came last.  To be fair, many advisors follow the fiduciary rule, putting their clients' needs before their own.  About 75 years ago, Fred Schwed Jr. wrote a seminal book called "Where Are the Customers' Yachts?" The title was a quote from a man who was admiring the yachts of bankers and stockbrokers.  It's a great read, I highly recommend it.  Okay, now I know the rules of the game, or at least two of the rules.  1) Invest in what you know. 2) The helpers may have different objectives than my own.  My belief in the stock market's ability to generate wealth was still unshaken.

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A Few Years Ago

My dad passed away unexpectedly in 2007, and shortly thereafter, my mom was faced with figuring out how to make her money last. Like many families, my mom and dad had their own financial ups and downs, some major family medical expenses, and career changes that all took their toll on their savings.  The more I do research for this blog and talk to other folks, the more common this dialogue has become.  Statistically, we are living longer, earning less, and still retiring at the traditional ages; all this leaves more years to be funded by some means other than a job.  Mom had a couple of rounds of not-so-successful experiences with professional money managers, and unfortunately, this is another common theme that keeps appearing in my research.  The market would have a correction, Mom got scared, and sold everything for cash.  Soon after, the market would rally, and she missed out.  So she moved to another firm, and the formula became Wash-Rinse-Repeat.  The truth of the matter was that Mom didn't have the temperament to manage her own portfolio, and the firms she was with weren't responsibly investing her money.  She had loads of positions that paid big dividends, but the underlying principle kept going down.  Those are bad companies hidden in funds with exciting names like XYZ Growth and Income Fund.

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"Beware the 'Helpers' who'll take your money" - Warren Buffett  

 

​And here I am trying to help.  Now that's a conundrum.

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A New Beginning

In 2016, Mom asked me to help her with her investments, probably figuring that I couldn't do any worse, and my guarantee that I would cover any losses probably felt good, too.  With this in mind, I was able to focus on creating a portfolio that would accomplish the following goals:

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1. Remain highly liquid, equivalent to cash; any investment can be easily sold.

2. Reduce volatility while taking advantage of the market's long-term growth.

3. Grow the overall portfolio value carefully, but not too carefully.

4. Keep cash on hand to be a buyer during market corrections.

 

I wrote these goals down and shared them in a detailed investment plan with my mom and my siblings. I find committing something to paper and sharing it with a broad audience tends to improve my own thinking.  I'm not showing her portfolio here; she wouldn't want me to. But we've accomplished all of these goals with a group of low-cost ETF index funds that provide diversification and growth, combined with a group of highly liquid stocks that also offer diversification, growth, and some dividends. Looking back, the portfolio reduced the volatile up-and-down swings that, in the past, would make her want to sell off and get out of the market.  She also didn't bother looking at her stocks as much because I was doing that for her, which reduced her stress about money.

 

The Revelation

One day, while watching my mom's portfolio, I had one of those revelations, you know the ones that make you say, "Duhhhh".  If my mom had this portfolio in place 10, 20, or 30 years ago, she wouldn't have any of the financial concerns that she has today.  The appreciation alone, when I do the math and project it out conservatively, is really astounding. Of course, half the companies in her portfolio didn't exist 30 years ago, but that's besides the point.  The principles of selecting the right stocks and index funds are all the same.  Before Mom passed away, she asked me to find a way to share what I did for her. "Try to help at least one other person, and it'll be worth it."

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So that's how I got to this point, to this blog, and wanting to take this to the next level.  I'm hoping that through this project and interacting with all of you who read it, we'll find an even better way to prepare our parents, ourselves, and our children for a better financial future.  That brings me to the next rule.

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"Take care of yourself, nobody else will care about you as much."  - Clay Baker

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Stay Invested,

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Clay Baker

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