Transcript below:

Erica D'Eramo 0:04

Hello, and welcome to the Two Piers Podcast, Season Two. I'm your host, Erica D'Eramo, and today I'll be joined by special guest Sandy Leeds. We'll be discussing some of the macroeconomic impacts of the COVID-19 pandemic, particularly on both women and communities of color. And we'll also explore some ways for us to increase our understanding of the markets.

Sandy is a faculty member in the finance department at the University of Texas at Austin. He teaches an acclaimed Macro Markets class, which is pretty renowned amongst the business students. While Sandy is a proud Crimson Tide fan, we do happen to share a Longhorn connection. Prior to joining the faculty at UT, Sandy managed money for a private money management firm. He was one of four portfolio managers responsible for approximately $1.6 billion of assets and he holds the Chartered Financial Analyst designation. But that's not all. In addition to money management experience, Sandy also has significant legal experience. He's a member of the Texas State Bar and has tried over 100 cases. He also participated in the regulation of the securities industry and is a published co-author of Investment Analysis and Portfolio Management.

One of the reasons that I wanted to have Sandy on the podcast is because of his efforts to make the understanding of markets and their movements accessible to people who may not have the opportunity to pursue an MBA. Sandy puts out a free weekly market update that analyzes and distills movements and happenings in the markets; you can sign up for that newsletter at sandyleeds.com. He also hosts a Macro Markets course that, while not free, has open enrollment, so no university affiliation is required. So Sandy, welcome to the podcast. Thanks for joining us.

Sandy Leeds 1:59

Thanks, Erica. Thanks for inviting me. I'm excited to be here.

Erica D'Eramo 2:02

So we have been seeing over the past year, some of these major impacts of COVID-19, on the markets, on the economy, and really some profound and unfortunate impacts on women and communities of color when it comes to employment and engagement in the workforce. So with the Two Piers mission, that is to create diverse and reflective workforces by unlocking, cultivating and supporting talent. These impacts are, you know, something that we wanted to explore a bit more, and we thought that you would have a great perspective on it.

Sandy Leeds 2:42

Well, it's great. I mean, these are, these are really important issues to me. So I love what you're doing.

Erica D'Eramo 2:48

Thanks. So I mean, one of the things we've seen in the news headlines a lot lately is around the metrics and statistics on women's employment numbers, and us kind of backsliding, something like 30 years with some of the the numbers that we're seeing of women in the workforce. So I was hoping that you might be able to kind of explore that with us and talk about what, what is what is the problem that we're seeing here?

Well, I think that the really big picture problem is that women have been more impacted by the pandemic than men. It's somewhat unusual, actually, that typically in a recession, men are impacted more, because you tend to see very cyclical things drop, you tend to see construction drop, which is dominated by men. You see, manufacturing slowdown, again, tends to be more heavily dominated by men, particularly in the past, but, but certainly, still a fair comment. But when you look at this, this pandemic, if you compare the jobs report that we got the first Friday of February, which tells us about our January employment, and you compare to one year earlier, the prior January, which was really pre pandemic, for the US and for the US labor market, women have lost about 5.2 million jobs since then, and men have lost about 4.4 million jobs. And so women have been impacted more. And the reasons for this are number one, obviously the service industry or the service sector, that women dominate the service sector and the service sector often requires close contact, and that's what's been shut down the most. And the other issue is that women bear a disproportionate amount of the responsibility for kids, for the home, for parents. And that's not to say that it should be that way, but rather that is what we're seeing. And so, you know, the result is when our schools are closed, it's, it's impacting women, even more. And, you know, one of the things that, that I always tell people is, you just look at, like the really basic idea of when you have people who are divorced, or people who never got married and have kids, the vast majority of the time, not all the time, but the vast majority of the time, what you see is that the kids end up with the mom. And, and then, you know, even when people are together, what you, you know, what you tend to see, and I asked my students this do long before the pandemic, I would say, how many of you would say your primary caregiver was your mother, rather than your father? And, you know, certainly the majority, and things of things have certainly changed over time, you know, I can look back to I was born in 1964. And, and I think back to, I lived in a very middle class, neighborhood, and, you know, up in New York, and Yonkers and, and it was all the dads that went to work, you know, I mean, I was out in the street playing, you're probably when I was 19. So when I was six years old, 1970 b, all the dads, and they'd all come home at five o'clock, and very few of the moms worked outside of the home. And so, but bottom line is that that's what we see. And so, you know, that's where the job losses have been. And, and, of course, you know, what we're worried about is just, you know, the, on a macro level, we worry that we're losing all this human capital, you know, we're losing the output of all of all these people, men and women, but you know, especially women, who's what we're talking about here, and productivity, and, you know, the problem that once you become long term unemployed, you sort of lose your connections to the workforce, you end up going back, it's harder to get a job, it's, it's harder to get fair pay, um, you know, we increase financial security, and you know, it, one of the things that that we have to worry about is that when these things happen, you sort of then re-victimize the victim. And what happens is that, then people consciously or subconsciously start to say, "Oh, well, you know, women have other responsibilities. And so they're going to be less reliable, when we need when we need people to work." Right? And that's, you know, that's, that just perpetuates problems like that. So, so, you know, we have a lot of problems. And as you said, you know, bringing it back 30 years, I think a lot of those views were going away, or hopefully, they're improving slowly, I think, you know, the younger generation, so much different than, than the older generation, but I think, you know, those, those the problems, and I think this really has furthered them or brought us back to them.

So we've kind of taken the mommy track and exacerbated it.

Sandy Leeds 8:09

Yeah, I think. Absolutely. And I mean, you I think one of the things that's, that's interesting is, when you look at wage inequality, you know, gender inequality with wages, um, you know, it's interesting to see, like, what the research shows about that, you know, it shows that, you know, obviously, the, the disruption in career when you take, you know, a year or two years off, or, you know, many women take five years off until you know, until the kids ready to go to school, that type of thing. That's certainly one issue. But, you know, other issues that we see are that, employers, whether or not a woman is intending to have kids start to assume that they will. Right? And, and that's, you know, the, you know, probably the most problematic, but, you know, it's sort of interesting, though, excuse me, because what you see is, um, in that research, a lot of other things that, you know, are sort of gender based, and that is that, like, particularly married women tend to not accept a job that requires moving. And, but then they move because the husband accepts a job somewhere else. And then what you have is someone who is trying to get a job without a job, right? When, when you move because of your spouse, and that's really difficult, and it's really difficult to get the correct match as far as skill set and economics and to get what you were making before. And you know, those are those are all you know, really big problems. And they, you know, if you think about it now, for a lot of people, men and women, but particularly women, you're going to have sort of being long term unemployed and looking for a job without a job. And and again, we know that's all problematic. That's all been part of the wage inequality that we've seen in the past.

Erica D'Eramo 10:10

Yeah, I think, I guess it was Einstein that said, there's no force greater than compounding interest. And I always think about that when I think about five years out of the workforce and missing out on those raises for five years, and then you extrapolate that across an entire career. And what is that? What does that do to the income inequality and kind of the final tally number of what somebody makes? And so when it comes down to who is going to take a break to take care of the kids, and you're looking at the finances, I mean, historically, we're showing that that wage gap kind of comes into play and that decision making so the person who has the higher wages kind of stays in the workforce, and the person who has the lower wages, financially, it makes the best decision for them to do the primary caregiving. So it kind of exacerbates it. Yeah.

Sandy Leeds 10:56

Yeah, absolutely. That, it's, it's more than just your income, income compounding obviously, right. It's, it's just sort of that human capital in general, the relationships and you know, just everything else. All right, I think I think it's, it makes it really hard. But I grinning potential.

Erica D'Eramo 11:13

Yeah. So what do you think some solutions to this could be?

Sandy Leeds 11:18

Yeah, it's such, it's such, these are such hard issues. But, you know, I think there are a ton of things that that we think about, I mean, I think the first thing that jumps out at everyone, and you hear from everyone say, is childcare, we need better childcare. You know, that's right now, why so many people, men and women, but again, particularly women aren't able to work right now. That, you know, we've, we've got to make childcare cheaper, we've got to make it more accessible, we've got to make it more attractive for people to work in that industry, too, right. It's a, you know, notoriously low paying job. You know, we've got to, with childcare, I'd also say, it's such an opportunity to improve our Pre-K education, which is really lacking. And, you know, it's one of the differences in, in households and I, I remember, when I started studying a lot of these issues, if you had said to me, oh, "What's more important, going to a good, you know, kindergarten, or going to a good college?" I, my thought was, "Oh, you know, you want to go to an elite college." But, you know, all the research shows, it's early education that matters, it sets you on this path to for success. And, you know, some kids are read to, you know, all the time; they grow up in a household that, that values education, if they're not, this is an opportunity to, to get them reading and to, you know, to get them to see sort of the joy of books and things like that. So I think childcare is an obvious issue, we've got to make it more accessible, and more affordable. Um, you know, we've got to, we've got to figure out how to incentivize companies to, you know, to make it easier for women to stay in, in the workforce. We've got to change the culture of companies, you know, we, we have, one of the things that we see, again, and not a comment on whether this is right or wrong, but just the fact that it is, is that, you know, women are taking all this responsibility or bear all this responsibility for you know, sick parents, kids, whatever it is. And so the result is that in a lot of these industries, that are jobs that require face time, you know, when you think about law and banking, you you don't see as many women at senior levels. And so, you know, there has to be more flexibility, you know, we have to reduce the importance of that, that face time. You know, there are little cultural issues at work that um, you know, that we have to sort of accept these gender differences that... you know, and I think this is an ironic one, but but what I always think about is that, you know, when women make mistakes, they tend to apologize, you know, funny thing, and men don't. And the, you know, these are general observations and, and I think that what you find is that apologizing is seen as a sign of weakness, right, which is insane. I mean, you know, I certainly...

Erica D'Eramo 14:31

I know, (laughter)

Sandy Leeds 14:32

You know, I certainly hope I always apologize when I make a mistake. I you know, I certainly teach, you know, all my kids, you know, my my sons and my daughter to always apologize, you know, we need transparency and financial reports, we need to understand, um, you know, the numbers of, of, you know, gender equality and wages. Um, you know, maybe what we need are incentives, tax incentives for companies. You know, we inset production in the US, why would you not incent, equality? You know, I think customers have to care, right? I mean, it has to be something that, that we care about. And I think, I think in certain fields, clients do care, right? They, they want to, they would like to do at least see diversity, they would like to see that it's not all men, you know, we, we know, I was an asset management, and we know that men and women think differently, and, you know, you're going to understand some products better than I am, I'm going to understand some products better than you do, because I use them, or you use them, right, and you see the world differently. And, you know, we all know, I don't have the numbers, you know, at the forefront, but, you know, we all know, the amount of home purchases that are done by the woman in the house, like, you know, I, you know, I'm my wife, you know, takes care of, like buying so much of the stuff I you know, I'm involved in, in so little of it, in many ways. And so, it's so important to be thinking that way. We knew that asset management, but it's got to be, it's got to be valued. You know, we've got to figure out better ways of, of, you know, helping women to get to the top, even if their career is disrupted. And, you know, I think that, that, you know, one of the things, and we've seen this at, you know, my university is that, you know, we've got to do wage surveys and make sure that wages are fair, um, you know, even in, you know, sort of liberal universities, you will find that there is inequality and, you know, inequality certainly makes people leave the workforce, if, if I'm not being treated fairly, if I'm not being respected, I will leave, I think, you know, I think one of the, you know, most important things, though, like, for a really long term perspective, is, we've got to, we've got to make women and, and, really, what I should say, is girls aware of jobs that they can get, when they get older, and when they, you know, when they go to college, and or, you know, whether or not they go to college, and after college, it's, you know, one of the things that that we tried to do, I ran this MBA investment fund at Texas for about 13 years. And one of the big problems we had was, it was all men, it was all men, you know, we would get, we would get all these applications from men, we, you know, we sometimes, we got no applications from women, sometimes we'd get one or two. And, you know, part of it was that... so, so, a woman, I worked with, Laura Starks, who's unbelievable, but you know, just just incredible what she's done. But she and I started this, this little conference for all the MBA women, right when they arrived at school, and to show them that, look, this is a field that's dying, to have women in it, um, that it's not just investment banking, where you do have to work insane hours, which, you know, again, a lot of women had already decided, look, I want to have a family and a career and banking is not going to work. Asset Management, you're not a better stock picker by, you know, working till 11 o'clock at night. And so we tried to sort of show that and we bring in, you know, very successful women from the field. But what we realized, it was already too late, it was already too late, they had gotten here. And they had already decided, you know, I mean, it's hilarious to see that, it's like, you get here, and you see the guys going to finance and the women go into marketing. It's like, you gotta be kidding me. I mean, it's, it's like 40 years ago, you know, and so, so the point is, it's too late at that point. And so we've got to start much earlier, and just sort of convincing people that look, this is a career for you. And you know, you're gonna see I mean, you see these little changes, you know, there there were, you know, women referees in the in the Super Bowl, you know, there was a woman from Vanderbilt who, you know, kicked in a college football game, those things they really do matter, I think, but but I think just on a more practical matter, you just you got to see women money managers, clients want to see it, little girls need to see it. And I think, you know, that's sort of my long tirade, but that's, you know, that's, that's, I think, what you know, what will really change things.

Erica D'Eramo 19:33

Yeah, we say the same issues in engineering as well. By the time you get to university, your pipeline has already diminished so much, nevermind by the end of university, but you raised a couple of points that I, I think are really interesting, in the context of COVID. So the face time issue, I'm wondering, with us, being forced into remote working, how much we are, perhaps, challenging the concept that you have to be in the office meeting clients face to face for X number of hours per day in order to be successful in this role. Do you think there's any opportunity for change there? Perhaps like a small silver lining on the COVID experience?

Sandy Leeds 20:19

That's interesting. You know, one of the interesting things that I've seen, you've probably seen the statistics, too, is that people are working more, people are working more from home. And I don't know, if they're just reporting that they're working more, or if they're actually working more, but I found that interesting. But, you know, I think that I think that this whole remote working is is a double edged sword. I, you know, what I'm really afraid of is, you know, a lot of these places are saying, look, you can go work from anywhere, you know, there are lots of firms in San Francisco in particular, they're saying, go work for anywhere, we're gonna adjust your pay down, if you're not in San Francisco, but but you can go live at the beach, the mountains, whatever, whatever you want to do. That sounds great. I, my real fear is this, that you are now going to be sort of a cog in the wheel, that you are, you know, are we going to promote you to a high level? Or are you you know, Erica in the mountains that handles accounts receivable, and that's sort of what you're good for. And that scares me, for everyone who's who's working remote

Erica D'Eramo 21:22

Proximity bias? Yeah.

Sandy Leeds 21:24

Absolutely. I mean, I think that you know, who's gonna get it, who's gonna get promoted, I worry will be the people who are working in headquarters. So so that scares me. But I will tell you this. I think that the the real benefit, could be particularly for women. In that, I think, as we accept remote work, I think that fits in with the flexibility. And and I think that, that, the other thing that is really helpful is if you think about that research, that I was mentioning that one of the one of the big causes of wage inequality on a gender, from a gender perspective, is the fact that women often move because of their partner. And, and they are then looking for a job without having a job. And that's just brutal to your wages, especially if you if you're at a higher level, where it's really hard to get those wages. Well, if you can at least keep your job, then from there, you can search for a job with, with the fact that you are now still making good wages, you're in a completely different position. And so I think from that perspective, it's it's a real positive, I think, the flexibility that it may offer so that we don't lose people from from the labor force, and also the fact that it will help you negotiate on a much, much better basis, I think that those things are, are possibly going to be the silver lining from all this.

Erica D'Eramo 23:01

Yeah, I think addressing that wage gap is just, and the root causes of that wage gap are, are really key to the retention factor, because of the very decisions that families have to make, right. And it becomes a compounding issue of, you know, maybe the woman isn't making as much because of wage discrimination or not, I'm not advocating for herself enough or having to take, you know, a few years off to be a primary caregiver. And then when you move that that's how the decision is made about who is the leading spouse in the lagging spouse, and so it just compounds on itself. So yeah, really interesting thoughts.

Sandy Leeds 23:43

Absolutely. I would also say this. I mean, it seems to just from my reading of the research that you're right, that that that does drive that sort of, you know, who's the higher earning and who's low earning, and so who do we move for? But I think that the research also shows that it's more than that, that it can that sometimes the husband is the lower earning spouse, but that is whose job we move forward to. I mean, I mean, I, you know...

Erica D'Eramo 23:56

Hm, societal as well as

Sandy Leeds 24:10

I think they're all issues and yeah, no, but I do think that's changing. I do think

Erica D'Eramo 24:15

Yeah. Well, I, you mentioned a comment about what I interpret as inclusivity, right, of women apologizing and that being seen as weakness, just some of these ways that we are shaped by society that represent in the workforce. And to me, I think, we hear a lot of talk about diversity and the importance of diversity. And we know better decisions are made by teams that have diverse perspectives, which you mentioned, that the idea of inclusivity to me is so important if we're going to bring these people into the workforce, but then punish them for behaving in the way that they've been socialized their entire lives. So if we truly want diverse thinking, it has to be more than just statistics, right? It has to be do we welcome people who apologize? And do we welcome, you know, humility or team building or some of these things that we typically associate with female behaviors? are we celebrating that? Or are we? Are we just really celebrating typically male behaviors and wanting our, our statistics to look a little different?

Sandy Leeds 24:22

Right, I think you're absolutely right. And I and and i think that what we forget is that clients customers often want the traits that we do tend to see more in women than men, that a willingness to say, you know, I don't know everything I don't, I don't understand everything, the willingness to apologize for mistakes, empathy. You know, I was reading an article recently about a private wealth management firm that caters to women. And they basically were saying, you know, what, what women clients want is empathy. They want someone who understands what their situation is, and, and you know, that the women investors were more likely to want their money to be doing something that was good, it wasn't just about having the most money, and, you know, and, and so, you know, I think I think those are all important.

Erica D'Eramo 26:22

That's fascinating. I, one of my tests, when I, when I do approach a company, and they talk to me about their parental leave, and how it's an example of them helping women particularly, I always ask, to what extent the men in the company are taking that parental leave as well, if it's available to them. And it's fascinating to me, because men are not taking parental leave, even when it's available, even when it's paid and free. So that's, that tells me very clearly that there is a there is a price or there is a stigma around the leave itself. And so I always wonder, you know, it might be paid parental leave, but what is the non-monetary price that's being paid? Because even when we neutralize the monetary aspect, men who can take leave are not necessarily taking it?

Sandy Leeds 27:14

Absolutely. I mean, you know, it's, I think that in the older generation, right, and I put myself in, in there, and I'm not saying I think like this, but I think in the older generation that is seen, that's seen as soft, right? It's that that's not what you do to succeed. And I think that I, you know, I think I think that is changing over time. And you know, I think I actually am more encouraged about gender inequality than maybe other issues. But I that I think, I think it's moving in the right direction. But I think that, um, I think it is really tough to get guys to do that. And it's, and especially in some industries, rather than, than others, and, you know, I agree with you.

Erica D'Eramo 28:05

Yeah, so this is a message to all the men out there who have parental leave coming up, please take it because it helps reduce stigma for the women who really do want to take for parental leave as well. So it's better for everyone. And those are prime prime weeks and months with the new addition to your family.

Sandy Leeds 28:22

Erica, I'll make a quick parenting comment about that. And that is that we have, we have three kids, and you know, the the, the third one was adopted. And so basically, that meant that she was bottle fed. And she was really the only one that I got up with on a regular basis. I got up every night with her. And what a huge difference I think it made. I mean, it was great for me, but I just think it's great for the relationship. And it's one of the things I tell all my you know, students as far as my my guy, the male students is that it makes a huge difference to miss that, miss out on that sleep. It really pays off. So anyway, there's my little commercial, my parenting commercial. Thank you.

Erica D'Eramo 29:09

So beyond just some of the impacts to women working in the workforce, we've also seen impacts as far as you know, other underserved communities, communities of color, etc. They've been particularly hard hit by COVID from an economic perspective, from a health perspective aspect. What are your thoughts on that topic?

Sandy Leeds 29:33

Um, you're absolutely right. I mean, I think that, you know, we we've sort of all read about the problems of that, and you say people of color, that's such a broad category, really. But when we particularly when we think about people, you know, who, if you just think of lower income, living in crowded housing and work on the front lines and not having access to health care. You know, not having assets that are benefiting as home prices are increasing and stock prices are going up. And, you know, we're seeing problems with less access to technology, so kids aren't attending school, from lower income households. You know, all those things are, are huge. And, you know, I think that I think that it's not just the pandemic, I mean, these these things have been, you know, these been issues for forever. And so, you know, I think those are the things that we're, you know, we're trying to figure out of how do we do better? And, you know, I think that a lot of these are the same sort of solutions, that, you know, we need better Pre-K, you know, for schools, we need, we need to figure out how to stop kids from from dropping out. We, you know, I think one of the biggest things is, in most parts of this country, we really do fund schools with local taxes. So if you're in a poor area, there's going to be poor funding. And, you know, we're one of just a handful of developed nations that spend less educating our low income, lower income kids than our higher income kids. That's crazy, like, how do you expect to have mobility if that's if that's what we do? Yeah, we need to make it safe to go to school. And in a lot of lower income neighborhoods, that's a dangerous walk. And, you know, we've got to, we've got to figure that out, we got to figure out minimum wage. Right. I mean, you know, that's a big issue. Right now, the Congressional Budget Office just put out a report this week about that. And, you know, it's interesting, because we know that if you make workers more expensive, you will have a loss of some jobs, right, that ultimately, you'll find that people, places will find a way to automate and that kind of thing. But the reality is, like, if you look at it, and that's what you've sort of seen that the CBO report basically says, you know, the idea of raising minimum wage is dead, because, you know, we could lose a million jobs. You know, if you look at it, it also says that, you know, we'll move like, you know, 27, will, like 10 million people out of poverty and 17 million people are likely to be better off because they were making a little bit more than minimum wage, and it's going to be raised up. And it's like, everything has a trade off, you know, everything has a trade off. And, you know, one of the things, I'll just also say that, what we've seen is that a large percentage of the country has already raised the minimum wage, right? The federal minimum wage is $7.25. But many states and cities have said, "No, you've got to pay more." We haven't seen, we haven't seen that loss of employment. And so, you know, we've got it, we've got to figure that one out. And it is it's a difficult issue, because you have really high cost standard of living in you know, San Francisco, you've got low cost of living in Mississippi, and can you you know, can you raise it to $15. And maybe it needs to be adjusted another way. But, you know, I think that's a big issue. I think, I think you you've got to have people in power, who want to help force change, I think of David Swensen is a very famous money manager, he manages Yale's endowment, and he's sort of seen as the, the guru in that field. And, you know, basically, he, you know, sometime in the last few months, he basically said, "Look, when we farm out money to money managers, we're going to be looking for diversity, you know, we we need to promote this." You know, we need role models, just like, like we talked about with the the gender issues, and, you know, you've sort of talked about engineering, but, you know, we need to do a better job of early explaining careers, you know, I think we need to get people of color near the money, right, that that to help, you know, wealth accumulation. I saw some statistics about financial planners, the CFP designation for financial planners, which I don't have, but, but just sort of looking at it. And it's like, I saw that 23% of financial planners are women, of course, you know, women make up just over 50% of our population. Black CFPs, 1.7%, you know, Black Americans...

Erica D'Eramo 34:18

That's striking.

Sandy Leeds 34:19

Yeah, black Americans, 13%, right, of our population, Hispanic CFPs, two and a half percent. That's 18% of our population, right? I mean, you've got to, you know, you, that that's a huge thing. You got to promote this wealth accumulation. And you've got to be near people who understand it, and know how to do it. And so that's really important. You've got to promote, not just like hiring, but training and mentoring and retaining and how many people are getting to senior levels. You know, we again, we need more transparency on all these things, and we need to make sure that, one of the things I I think that has certainly improved is we're getting a lot of lower income kids a lot of kids of color into colleges, but then from there, are they getting the same opportunities? You know, just I just look in the business school, when when you grew up with a dad, who was a banker, maybe a mom, but more likely a dad, who was a banker, or you know, whatever, you know how to dress, right? You know how to act in these interviews. Those are the things that if you didn't come from that, how would you know? I mean, I can literally remember I mean, this is this sounds so funny. This is, you know, this sounds like Saturday Night Fever or something but, but which that's probably, you know, a reference way before your time, Erica, but but the bottom line is, like, I remember when I was a first year law student, and I was interviewing, and after my interview, I was in the same city as my older sister who's five years older, she was like a second mother to me. And we're sitting at dinner, and she looked across to me, I was in a suit. And she said, "Alright, you have got to wear an undershirt underneath your shirt." And I was like, Yeah, I didn't, know, it's like, you know, she was lucky, I didn't have like, my collar open with my gold chains. But the bottom line is, that that's what you need. Right? And, and, you know, like, I was fortunate, because I had her five years ahead. And, you know, she was the one who told me "Look, in college, you've got to take classes from these three teachers, because they're nationally known, you've got to excel in those classes, you know, get to know them, and have them write your letters of recommendation, because that's the only way you're going to get into a top law school." Right? Who knew? I would have never known that, right. I didn't want to know any teachers. You know, I just I was just getting through. And so, you know, we need that kind of mentoring. Especially because a lot of us, you know, didn't have it unless, unless we were lucky enough to have, you know, a sibling that went ahead of us. And, you know, and I think something like you said earlier, at the end of the day, people have to appreciate that, that diversity results in more creative solutions, that it attracts clients. You know, just just from a business perspective, you have to remember that people of color are going to be the majority by 2045. And, you know, I think it's just, it's a matter of, I think most people, it's, it's not a matter of wanting to discriminate, or anything like that, I think it's a matter that most of us just tend to like people who are just like us, you know, that they look like us, they act like us, they have the same backgrounds, like, you know, you meet someone, it's like, oh, this is my long lost brother. And you know, and that's a tough one that, you know, and I think, you know, you see places like the NFL trying to say no, you know, you've got to interview others, you know, people who don't look like your brother. And yeah, you know, it's tough. But I think that when you have these natural tendencies to do that, and I think we all do that.

Erica D'Eramo 38:08

Yeah, I mean, there are many books written on heuristics and how biases work, and they're there in order to help us survive as a species. And also, they don't necessarily drive the best decisions for a business. So that's why we need to put more systemic processes in place so that we're not just relying upon our own biases for who gets the promotion or who gets the informal mentoring. You're, because you're right, there are so many unspoken rules. And this is across anyone who's not been in the tent, you know, in the inside club. They don't necessarily know those unspoken rules, they don't necessarily know to wear the undershirt or who to talk to or which, which, you know, club they should join, to hobnob. So. Yeah. How are we going to address that in a more systemic, repeatable way, that's not reliant on our human brains, which are, you know, wired for survival, but not necessarily, for the best overall outcome.

Sandy Leeds 39:13

I tell you another story with that. And the point of it is, I think sometimes you have to say uncomfortable things. Like when I was at a, I was at a big law firm. And when we were recruiting, what we would do is we would take a recruit to dinner, and then the next day, we would interview them, and basically the young associate, which was me, and, you know, I was one of a billion of them, but but the young associate would go pick up the recruit and take them to dinner and we'd meet a partner, often a partner and their spouse there. And I, we had this recruit of a woman and the partner said to her at dinner, "Why did you go to this other school rather than the University of Texas?" We were Dallas firm. And she said, "You know, I didn't get into Texas." And, you know, she didn't realize it, but at that point the interview was done. She wasn't getting a job. And, you know, the correct answer was, you know, "This school had this program, you know, program x, and that really attracted me. And I thought I was gonna get this really unique experience," and that kind of thing. And, you know, when I drove her back to her hotel, I told her, I said, you know, I said, "Look," I said, "Please don't repeat this," because the reality was, I would have been in a lot of trouble for telling her this, I said, "You're not going to get a job, you know, the odds are against you, because no one wants to hear that you didn't get into Texas." And I said, "You know, you're gonna, you're gonna have so many opportunities at these big firms," because he or she was on Law Review and that kind of thing. And I said, you know, here's, here's how you need to answer this. And, and, you know, I really questioned the whole drive, whether I should say this to her or not, and I did. And it was funny, because she wrote me a long, long letter, you know, handwritten letter, several months later, and, and basically, we just like, "Thank you so much, I would have repeated that, you know, so many times," and she told me all the different offers she got? And, you know, I think so sometimes you have to say those uncomfortable things to help people. And you know, it's one things I was always happy that I did. But I think that's, you know, that I was sort of doing what my sister said to me, although my sister had no trouble saying anything uncomfortable.

Erica D'Eramo 41:37

Yeah, I think this is one of the things that I worry the most about with the chilling effect of some of the, the narrative that we're hearing after the #MeToo movement. I mean, we're still in the #MeToo movement, but some of the commentary that I've heard about how men are just, like pulling back, and not engaging, rather than just engaging respectfully, it's, it's like, oh, I'm just gonna not take any risks. And it deprives people, women of women, particularly women of color, just anyone who needs that guidance, that kind of clue into what the what the silent messages are. I feel like they're being deprived of that whenever we sort of say like, "Oh, the safest thing is to just not go to dinner with that person or not have a beer with that person." They're missing out on kind of that, that little like, "Hey, this is how this needs to go. You wouldn't have known that unless I could be really candid with you." So, yeah, yeah. I mean, I think we'll, we'll have to find our way through it, I just hope that people are still willing to have the openness, the brave conversations and to be corrected, sometimes, you know, it's I mean, it, it can be uncomfortable, and sometimes we step on a line, and sometimes we get corrected, and, and we have to not, like run away with our tail between our legs and just come back and, and keep engaging and keep growing. So yeah, it's it's tough, but I'm, so I'm curious if there's any, any other thoughts you have on, you know, some of the some of the more systematic things that, from a macroeconomics point of view, we should be looking at, just with COVID now, in our hindsight, as we go forward?

Sandy Leeds 43:35

Well, I mean I think that from from a macro perspective, I think we need to figure out how we can avoid this happening again, you know, I think that, you know, from what I'm reading, the, the most important thing you can do is shut everything down right away. And, you know, in other words, and, you know, this sounds terrible, but it's, you've got to shut down for a few weeks right away, you've got to, you've got to actually close the borders, you've got to do everything, it just has to, you've got to get rid of the virus, because once it gets out, it's done. And, you know, there was nothing we could do after sort of the initial decisions. And so, you know, I think I think we've got to figure this this one out, because it certainly could, could happen. Again, I think that's, you know, I think that's a really big, big issue. You know, I think I think that this, you know, what everyone says about COVID is that it's accelerated so many of the trends, you know, the, the colleges that are in trouble are now in more trouble now. You know, we're so much more ready to do a meeting by Zoom rather than travel across the country. Um, you know, I think that, that it also may be accelerating inequality, income inequality, and maybe better said wealth inequality where, you know, those of us with houses and stock portfolios are doing great and as That's

Erica D'Eramo 45:00

Assets are going up.

Sandy Leeds 45:02

You know, I said several times in my class last semester that we would feel a lot different about this if stocks were still down 35% like they were in March. But, you know, the reality is that when it's not where um, you know, I don't really feel the pain, I don't feel if I in fact, I'm spending a lot less money right now. And, you know, I think that's an issue. I think one of the big macro issues that we're facing right now is, I think that we're doing all the stimulus spending, all these people have, the majority of our savings are much higher, and we've got $1.6 trillion more savings than we would have otherwise, because of all the government transfers. I personally think that, you know, we need to be doing a better job of giving money to the people who need it, rather than just in general sending out checks, you know, if you're making $100,000, and you're still working, I'm not sure why we should be sending checks, we need to be able to support the unemployed for longer periods of time. And, you know, I think it's easy when we have a crisis to spend money, but you got to remember that this is going to mean that we do less infrastructure spending in the future things that are going to, you know, make it easier for people who live in a low income neighborhood to have transportation to jobs, right. I mean, like things that really matter, you know, rather than just sending money to people who already have jobs, you know, I think I think part of what we're doing. And, you know, it's and this is a particularly easy time to do this, to say this, because the Republicans did it. And now the Democrats are doing it. Like, I think I think those are some of the really big macro issues that that we're seeing.

Erica D'Eramo 46:48

Yeah, yeah, the infrastructure comment is an interesting one, like, what are we doing for the long term to make, to make to dull the impact perhaps, of future crises like this, and having some of that underlying infrastructure is probably critical. So I am curious, for on an individual level, what your advice would be on how, you know, we can maybe break down some of these barriers around the perceived boys club of investment and talking about the markets and talking about our stocks, because I still find it somewhat intimidating to be honest, even after an MBA and after working in mergers and acquisitions. I, it's not a conversation I readily will jump into for fear of kind of not saying the right thing or being seen as, you know, investment illiterate. And yet, if you asked me to talk about a compressor, I could talk for days. Yeah, so what can we do for individuals like me that want increased awareness vocabulary?

Sandy Leeds 48:04

Well, first, let me say that if you find someone who wants to talk about a compressor for several days, let let me know, so I can stay away. The, the, and the reality is, like, I don't even know what a compressor is. But the you know, I think that I tell you, this is gonna sound funny, but I think the best thing someone could do is, they could every so often watch CNBC, and when they watch CNBC, they should have a notebook. And they should write down what all the experts say. And then look at that notebook a month later, and you'll see that just as often as being right, they're wrong, that, you know, it's, it's like when you hear an expert tell you who's gonna win a game, you know, a football game or a basketball game, that kind of thing. You know, I trust that they know a lot more than I do, that they played the game and that kind of thing. They're, they're wrong just as often as they're right. And so, you know, I think that's the first thing to do to get confidence is to realize that none of us know what's going on. You know, it, no one would have told you on March 23rd, that we were going to have this huge rally, right and stocks and that's, that's when the market bottomed or how the financial crisis was gonna end or anything like that. So I think the first thing to realize is that the biggest difference is that some people can really speak with confidence and others are humble enough to realize that they don't know. And, you know, I think from there, that what you have to do is find something that you can read that doesn't take you know, 100 hours a week, and that you can just sort of keep building and I will tell you that this that like students would always say to me, what should "What should I be reading?" And one summer, you know, when I had a couple days, I took a couple days to do nothing but asked that question, like what should I tell the students to read because I grew up reading the Wall Street Journal. You know, it's just sort of what I was used to. But there's so much now there's so much online. And, you know, I think that number one you got, you got to find what you like. But I will say I'm a huge fan of Barron's, Barron's comes out once a week it comes out Saturday morning, it's it's dated Monday, um, it actually online comes out at about 10 o'clock, you know, I guess 10 o'clock, Eastern Time, nine o'clock Central roughly, I can sort of see the articles. And the reason I think that's, that's a great source is that the Wall Street Journal and Financial Times, all those places, they tell you what the news was, like what happened. Barron's tells you how the markets reacted to the news. And I think that's what we all want to learn. I think one of the other you know, one of the other best piece of advice that I give students who want to learn this stuff is: it's great to read read read, but a great thing to do is instead of reading so many articles, and not retaining that much, is outline a few articles. And when you do that, you sort of see how ideas fit together. And that's, that's sort of that really careful reading that helps you learn. And, you know, you're not going to know everything all at once. But it's just that, that inquiry that that drives you to, to a higher level. And you know, that that'd be my best advice. But I think also, um, you know, just to realize that most, no one knows what's going to happen, if any of us knew whatt was gonna happen, if any of us knew what was gonna happen to Bitcoin or Tesla, you know, or GameStop at one point, I mean, you know, we'd all be fabulously wealthy, and but every so often, some people get lucky, but it's hard to repeat. And so you sort of have to realize that they're, you know, they're just some basic concepts we have to know about diversification and investing. And, and, you know, the most important thing is to participate. And I tell you, one last thing it was study, I saw that, that basically, they asked people how knowledgeable they were about finance. And what you found was that a lot of people assess themselves as very knowledgeable. And you know that tends to be you know, that confidence tends to be a male trait. And what happens though, is that the people who are super confident, they invest, and I would argue that, even if they do dumb things, and they underperform the market by a significant amount, they're still usually earning a positive rate of return.

Erica D'Eramo 53:00

And this is confirmation bias.

Sandy Leeds 53:03

People who don't, don't invest, because they think they know nothing, they get zero. And so, you know, I think that you really have to think about the importance of that confidence and getting and getting into the game. Because there are simple things you can do with just to putting your money in index funds, having a really long term perspective. You know, I like even at my age, where my might term isn't really as long, and I'm risk averse, when I do is I think of my money and you know our money in our family as our kids money. And they have a really long time horizon. And so that lets me have that perspective that you don't really need much more than that.

Erica D'Eramo 53:46

Yeah, that's, that, and those are, that's accessible. I think a lot of people perceive that it takes wealth to learn about wealth, it takes kind of the rich dad or the, like I said, the, you know, Executive MBA experience or whatever. And, and actually, there are publications and there are ways that we can, there's TV, there's CNBC, and there are ways that we can just increase our own vocabulary, understanding and literacy around investments in the in the markets. So yeah, thank you so much for your thoughts on that. Are there are there any other kind of closing thoughts that you had or recommendations?

Sandy Leeds 54:31

I don't know that we have anything else I think, you know, these are these are such interesting issues. I you know, they're issues that I read about all the time and you know, want to learn more about and so so I appreciate you talking with me about these.

Erica D'Eramo 54:45

Well, one resource that you have not recommended but I will recommend is signing up for your kind of weekly markets review that is very informative, and just really helps me distill down the key things that I should be understanding from what's happening in, you know, in the week. So again that you can sign up for at sandyleeds.com, and, and any other kind of events or courses that you're hosting, I think you put that up there as well and inform folks, so it's a good resource.

Sandy Leeds 55:20

I do. Well thank you very much.

Erica D'Eramo 55:22

Yeah, thank you, Sandy. We appreciate it. And for Two Piers, you can find our information on any of the social media platforms. So we're on Facebook, we're on Twitter, Instagram, and LinkedIn and you can always find us at our website, which is twopiersconsulting.com.