Lex Sokolin - Put the Proven Power of Diversification on Your Side

https://www.linkedin.com/in/alexeysokolin/ (Lex Sokolin) iLex Sokolin is a futurist and an entrepreneur focused on the next generation of financial services. He is the global fintech co-head at ConsenSys, a blockchain technology company building the infrastructure, applications, and practices that enable a decentralized world. Lex focuses on emerging digital assets, public and private enterprise blockchain solutions, and decentralized autonomous organizations. Previously, Lex was the global director of fintech strategy at Autonomous Research (acquired by AllianceBernstein), an equity research firm serving institutional investors, where he covered artificial intelligence, blockchain, neobanks, digital lenders, roboadvisors, payments, insurtech, and mixed reality. Before Autonomous, Lex was COO at https://www.advisorengine.com/ (AdvisorEngine), a digital wealth management technology platform, and CEO of NestEgg Wealth, a roboadvisor that partnered with financial advisors. Prior to NestEgg, Lex held roles in investment management and banking at Barclays, Lehman Brothers and Deutsche Bank. Lex is a contributor of thought leadership to https://www.wsj.com/ (The Wall Street Journal), The Economist, https://www.bloomberg.com/ (Bloomberg), the Financial Times, Reuters, American Banker, ThinkAdvisor, and InvestmentNews, among others. He is a regular speaker at industry conferences such as Money2020, LendIt, Schwab Impact, In|Vest, https://t3technologyhub.com/ (T3 Enterprise Edition), and Consensus. He earned a JD/MBA from Columbia University and a BA in economics and law from https://www.amherst.edu/ (Amherst College).   “The good news is that I didn’t have any money, or whatever money I did have I put into some discounted Lehman stock thinking these guys knew what they’re talking about. And if there’s so much confidence, and they have such fancy suits, and they get paid so much, this thing’s got to … go up. And of course ... it didn’t go up, not at all, not in any way whatsoever, it just went down.” Lex Sokolin, on his time at Lehman Brothers in 2007     Support our sponsor   Today’s episode is sponsored by the Women Building Wealth membership group, the complete proven step-by-step course to guide women from novice to competent investor. To learn more, visit: WomenBuildingWealth.net.     Worst investment ever Fresh graduate joins Lehman Brothers analyst program The year was 2006. Lex had just graduated from his undergraduate degree in economics. It was still cool to work in finance. He joined the Lehman Brothers’ analyst program alongside 40-50 people when the brand was very strong. His intake were young kids out of school, and associates. They were starting at the investment management division. One of the orientation activities was a stock-picking contest in which new staff had three months to generate the highest returns in a no-risk setting. Wins stock-picking contest just as big banks start to fail He won, which did amazing and damaging things for his ego. He was on top of the world as he had bested Stanford and Harvard people, and was on the road to success. It was now 2007. Bear Stearns appeared to be failing and collapsed shortly afterward. Rumors were circulating that the big banks had a lot of bad debt on their balance sheets and that they couldn’t meet their obligations. A liquidity crisis was looming and Lehman was in the crosshairs. Staff 401K packages are matched in Lehman stock At the time, Lex was in this investment management business and the Lehman price was around US$120 per share. Then it started to fall. It halved its value to 60. Then it plunged to 20 and Lex remembers that day. There was a strong corporate culture at Lehman Brothers. The corporate color was green so people would say everybody leaves green because everyone’s on the same team. So managing directors got paid in Lehman stock as a percentage of their accomplishments. Analysts such as Lex were matched in their 401K...